Easy Meals Now (EMN) operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who phone or fax orders to EMN. EMN allocates variable and fixed overhead costs on the basis of delivery time. EMN's owner, Don King, obtains the following information for May 2013 overhead costs:

Required
1. Compute spending and efficiency variances for EMN's variable overhead in May 2013.
2. Compute the spending variance and production-volume variance for EMN's fixed overhead in May 2013.
3. Comment on EMN's overhead variances and suggest how Don King might manage EMN's variable overhead differently from its fixed overhead costs.

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Page Layout Home Insert Data Review Formulas A Actual Static Easy Meals Now (May 2013) Results Budget 2 Output units (number of deliveries) 3 Hours per delivery 4 Hours of delivery time 5 Variable overhead cost per hour of delivery time 6 Variable overhead costs 7 Fixed overhead costs 8,600 12,000 0.70 5,640 $ 1.75 $10,716 $39,200 $33,600 1.