FLEXIBLE BUDGET, OVERHEAD VARIANCES Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed:

Pairs of shoes to be produced and sold 55,000 Standard cost per unit:
Direct materials $15 Direct labor 12 Variable overhead 6 Fixed overhead 3 Total unit cost $36 During the year, a total of 50,000 units were produced and sold. The following actual costs were incurred:
Direct materials $775,000 Direct labor 590,000 Variable overhead 310,000 Fixed overhead 180,000 There were no beginning or ending inventories of raw materials. In producing the 50,000 units, 63,000 hours were worked, 5 percent more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours.
Required:
. Using a flexible budget, prepare a performance report comparing expected costs for the actual production with actual costs.
. Determine the following:

a. Fixed overhead spending and volume variances.

b. Variable overhead spending and efficiency variances.
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