Textbook Problem

Use the following information for Exercises 10-56 and 10-57:

Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.

Exercise 10-56 Variable Overhead Variances, Service Company

Refer to the information for Rostand Inc. above.

Required:

1. 1. Compute the standard hours allowed for actual deliveries made last year.
2. 2. Compute the variable overhead spending and efficiency variances.