=+12-45 KKK Overhead variances and sales-volume variance OBJECTIVES 3, 4, 6 Eco-Green Ltd manufactures premium jute shopping bags that it plans to sell for $5 each. Budgeted production and sales for these bags for 2015 is 800000 bags, with a standard of 400000 machine hours for the whole year. Budgeted fixed overhead costs are

$470000, and variable overhead cost is $1.60 per machine-hour.

Because of increased demand, actual production and sales of the bags for 2015 are 900000 bags using 440000 actual machine-hours. Actual variable overhead costs are $699600 and actual fixed overhead is $501900. Actual selling price is $6 per bag.

Direct materials and direct labour actual costs were the same as standard costs, which were $1.20 per unit and $1.80 per unit, respectively.

Required 1 Calculate the variable overhead and fixed overhead variances (spending, efficiency, spending and volume).