Variance analysis, graphs. Homer Metal Stamping budgets and allocates overhead costs using machine-hours. Homer’s budget for 2007 was 10,000 machine-hours. Following is additional information relating to overhead for 2007:

Budgeted fixed overhead $ 720,000 Actual fixed overhead $ 708,000 Budgeted variable overhead $1,200,000 Actual variable overhead $1,320,000 Budgeted machine-hours allowed for actual output 9,800 Actual machine-hours used 9,500 Required 1. Compute the variable overhead spending variance and efficiency variance.

2. Compute the fixed overhead spending variance and production-volume variance.

3. Draw graphs similar to those in Exhibit 8-4, Panel A (variable overhead) and Panel B

(fixed overhead) on page 301.