The document discusses Hanson's variable manufacturing overhead variances for a week. It states that Hanson's spending variance (VOSV) for variable manufacturing overhead was $465 unfavorable. Hanson's efficiency variance (VOEV) for variable manufacturing overhead was $150 unfavorable. The document provides calculations to show how these variances were derived based on actual hours of 1,550, standard hours of 1,500, an actual rate of $3.30 per hour and a standard rate of $3.00 per hour.

1. Variazione dei Costi
Standard
Costi variabili di fabbricazione

2. Standard Costs
Now let’s calculate
standard cost
variances for the
last of the variable
production costs –
variable
manufacturing
overhead.

3. Note

4. Hanson’s spending variance (VOSV) for
variable manufacturing overhead for
the week was:
a. $465 unfavorable.
b. $400 favorable.
c. $335 unfavorable.
d. $300 favorable.
Hanson’s spending variance (VOSV) for
variable manufacturing overhead for
the week was:
a. $465 unfavorable.
b. $400 favorable.
c. $335 unfavorable.
d. $300 favorable.
Quick Check  Zippy

5. Hanson’s spending variance (VOSV) for
variable manufacturing overhead for
the week was:
a. $465 unfavorable.
b. $400 favorable.
c. $335 unfavorable.
d. $300 favorable.
Hanson’s spending variance (VOSV) for
variable manufacturing overhead for
the week was:
a. $465 unfavorable.
b. $400 favorable.
c. $335 unfavorable.
d. $300 favorable.
Quick Check 
SV = AH(AR - SR)
SV = 1,550 hrs($3.30 - $3.00)
SV = $465 unfavorable
Zippy

6. Hanson’s efficiency variance (VOEV) for
variable manufacturing overhead for the
week was:
a. $435 unfavorable.
b. $435 favorable.
c. $150 unfavorable.
d. $150 favorable.
Hanson’s efficiency variance (VOEV) for
variable manufacturing overhead for the
week was:
a. $435 unfavorable.
b. $435 favorable.
c. $150 unfavorable.
d. $150 favorable.
Quick Check  Zippy

7. Hanson’s efficiency variance (VOEV) for
variable manufacturing overhead for the
week was:
a. $435 unfavorable.
b. $435 favorable.
c. $150 unfavorable.
d. $150 favorable.
Hanson’s efficiency variance (VOEV) for
variable manufacturing overhead for the
week was:
a. $435 unfavorable.
b. $435 favorable.
c. $150 unfavorable.
d. $150 favorable.
Quick Check 
EV = SR(AH - SH)
EV = $3.00(1,550 hrs - 1,500 hrs)
EV = $150 unfavorable
1,000 units × 1.5 hrs per unit
Zippy

8. Spending variance
$465 unfavorable
Efficiency variance
$150 unfavorable
1,550 hours 1,550 hours 1,500 hours
× × ×
$3.30 per hour $3.00 per hour $3.00 per hour
= $5,115 = $4,650 = $4,500
Actual Hours Actual Hours Standard Hours
× × ×
Actual Rate Standard Rate Standard Rate
Variable Manufacturing
Overhead Variances
Zippy

9. Variable Manufacturing Overhead
Variances – A Closer Look
If variable overhead is applied on the basis
of direct labor hours, the labor efficiency
and variable overhead efficiency variances
will move in tandem.
If variable overhead is applied on the basis
of direct labor hours, the labor efficiency
and variable overhead efficiency variances
will move in tandem.

10. Variance Analysis and
Management by Exception
How do I know which
variances to
investigate?
Larger variances, in
dollar amount or as
a percentage of the
standard, are
investigated first.