=+12-16 K Variable manufacturing overhead, variance analysis OBJECTIVE 3 Stafford Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs).

Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labour-hours per suit.

For June 2015, each suit is budgeted to take 4 labour-hours. Budgeted variable manufacturing overhead cost per labour-hour is $12.

The budgeted number of suits to be manufactured in June 2015 is 1040.

Actual variable manufacturing overhead costs in June 2015 were $52164 for 1080 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labour-hours for June were 4536.

Required 1 Calculate the flexible-budget variance, the spending variance and the efficiency variance for variable manufacturing overhead.

2 Comment on the results.