The information shown below was taken from the annual manufacturing overhead cost budget of Itanagar plc.

Variable manufacturing overhead costs..........................................£34,650

Fixed manufacturing overhead costs...............................................£19,800

Normal production level in labor hours...........................................16,500

Normal production level in units.......................................................4,125

Standard labor hours per unit..............................................................4

During the year, 4,050 units were produced, 16,100 hours were worked, and the actual manufacturing overhead was £55,500. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.

Instructions

a. Compute the total, fi xed, and variable predetermined manufacturing overhead rates.

b. Compute the total, controllable, and volume overhead variances.

c. Briefl y interpret the overhead controllable and volume variances computed in (b).