Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed:
Pairs of shoes to be produced and sold .......55,000
Standard cost per unit:
Direct materials .................$ 15
Direct labor .................. 12
VOH ...................... 6
FOH ...................... 3
Total unit cost .................$ 36
During the year, a total of 50,000 units were produced and sold. The following actual costs were incurred:

There were no beginning or ending inventories of raw materials. In producing the 50,000 units, 63,000 hours were worked, 5 percent more hours than the standard allowed for the actual out-put. Overhead costs are applied to production using direct labor hours.
Required:
1. Using a flexible budget, prepare a performance report comparing expected costs for the actual production with actual costs.
2. Determine the following:
(a) Fixed overhead spending and volume variances
(b) Variable overhead spending and efficiency variances.

Transcribed Image Text:

Direct materials Direct labor $775,000 590,000 VOH $310,000 FOH 180,000