Manitoba Paper Company packages paper for photocopiers. The company has developed standard over-head rates based on a monthly practical capacity of 90,000 direct-labor hours as follows:

Standard costs per unit (one box of paper):

Variable overhead (2 hours @ $6).........................................$12

Fixed overhead (2 hours @ $10)........................................... 20

Total.......................................................................................$32

During June, 45,000 units were scheduled for production; however, only 40,000 units were actually produced. The following data relate to June.

1. Actual overhead incurred totaled $1,371,500, of which $511,500 was variable and $860,000 was fixed.

2. Actual direct-labor cost incurred was $1,567,500 for 82,500 actual hours of work.

Required:

Prepare two exhibits similar to Exhibits 11–6 and 11–8 in the chapter, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.

1. Variable-overhead spending variance.

2. Variable-overhead efficiency variance.

3. Fixed-overhead budget variance.

4. Fixed-overhead volume variance.

(CMA, adapted)