Shoppers Pharmacy Operates a Home Delivery Service for More Than

Shoppers Pharmacy operates a home delivery service for more than 2,000 home-bound clients. The company has a fleet of vehicles and has invested in a sophisticated computerized communications system to coordinate its deliveries. The company has gathered the following data on last year's operations: $\begin{array}{ll}\text { Deliveries made: } & 22,000 \\\text { Direct labour: } & 15,500 \text { delivery hours at } \$ 8 \text { per hour } \\\text { Actual variable overhead: } & \$ 150,000\end{array}$ The company uses a standard costing system. During the year, the following variable overhead rate was used: $8.25 per delivery hour. The labour standard requires 0.80 hour per delivery.
Required:
A. Calculate the variable overhead spending variance.
B. Calculate the variable overhead efficiency variance.

Correct Answer:

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A. VOH spending variance
= AVOH - (SVOR ...

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