Furniture, Inc. specializes in the production of futons. It uses standard costing and flexible budgets to account for the production of a new line of futons. For 2010, budgeted variable overhead at a level of 3,200 standard monthly direct labor-hours was $25,600; budgeted to: overhead at 4,000 standard monthly direct labor-hours was $79,040. The standard cost allocated to each output included a total overhead rate of 120% of standard direct labor costs. For October, Furniture, Inc. incurred total overhead of $99,600 and direct labor costs of $80,976. The direct labor price variance was $3,856 unfavorable. The direct labor flexible-budget variance was $5,776 unfavorable. The standard lab:’ price was $16 per hour. The production-volume variance was $5,600, favorable.

1. Compute the direct labor efficiency variance and the spending and efficiency variances for overhead: Also, compute the denominator level.

2. Describe how individual variable overhead items are controlled from day to day. Also, describe hc1 individual fixed overhead items are controlled.