Mankato Control Company, which manufactures electrical switches, uses a standard-costing system. The standard manufacturing overhead costs per switch are based on direct-labor hours and are as follows:

The following information is available for the month of October.
• Variable overhead costs were \($3,510,000\) .
• Fixed overhead costs were \($5,625,000\).
• 56,000 switches were produced, although 60,000 switches were scheduled to be produced.
• 275,000 direct-labor hours were worked at a total cost of \($3,825,000\) .

Required: 

Compute the variable-overhead spending and efficiency variances and the fixed-overhead budget and volume variances for October. Indicate whether a variance is favorable or unfavorable where appropriate.

Transcribed Image Text:

Variable overhead (5 hours @ $12.00 per hour). Fixed overhead (5 hours @ $18.00 per hour)". Total overhead. $ 60 90 30 $150