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Business, 06.04.2020 19:02 Donlito6997

Variable Overhead Variances Smith Tax Company considers 6,000 direct labor hours or 300 tax

returns its normal monthly capacity. Its standard variable overhead rate is $50 per direct labor hour.

During the current month, $250,400 of variable overhead cost was incurred in working 5,500 direct

labor hours to prepare 270 tax returns. Determine the following variances, and indicate whether each

is favorable or unfavorable:
a. Variable overhead spending
b. Variable overhead efficiency

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Answers: 1

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