=+Nina Cruz is the newly appointed president of Beyond Products. She is examining the May results for the Aerospace Products Division. This division manufactures wing parts for satellites. Her current concern is with manufacturing overhead costs at the Aerospace Products Division. Both variable and fixed overhead costs are allocated to the wing parts on the basis of laser-cutting-hours. The following budget information is available:

Budgeted variable overhead rate $200 per hour Budgeted fixed overhead rate $240 per hour Budgeted laser-cutting time per wing part 1.5 hours Budgeted production and sales for May 5000 wing parts Budgeted fixed overhead costs for May $1 800 000 Actual results for May are:

Wing parts produced and sold 4800 units Laser-cutting-hours used 8400 hours Variable overhead costs $1 478 400 Fixed overhead costs $1 832 200 Required 1 Calculate the spending variance and the efficiency variance for variable overhead.

2 Calculate the spending variance and the production-volume variance for fixed overhead.

3 Give two explanations for each of the variances calculated in requirements 1 and 2.