Review the data from Premium, Inc. given in Exercise E23-18. Consider the ­following additional information:

Static budget variable overhead.......... $ 1,600

Static budget fixed overhead ..........$ 3,200

Static budget direct labor hours ..........1,600 hours

Static budget number of units ..........800 units

Premium allocates manufacturing overhead to production based on standard direct labor hours. Premium reported the following actual results for 2014: actual variable overhead, $ 1,900; actual fixed overhead, $ 3,300.

Requirements

1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

2. Explain why the variances are favorable or unfavorable.