Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The company’s cost accountant has gathered the following information needed to perform a variance analysis at the end of the month:

Standard Cost Information

Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5 per pound

Quantity allowed per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 pounds per unit

Direct labor rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.00 per hour

Hours allowed per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 hours per unit

Fixed overhead budgeted . . . . . . . . . . . . . . . . . . . . . . . . $12,000 per month

Normal level of production . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 units

Variable overhead application rate . . . . . . . . . . . . . . . . . . . $ 2.00 per unit

Fixed overhead application rate ($12,000 _ 1,200 units) . . . 10.00 per unit

Total overhead application rate. . . . . . . . . . . . . . . . . . . . . . $12.00 per unit

Actual Cost Information

Cost of materials purchased and used . . . . . . . . . . . . . . . . . . . $468,000

Pounds of materials purchased and used . . . . . . . . . . . . . . . . . .104,000 pounds

Cost of direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $46,480

Hours of direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240 hours

Cost of variable overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$2,352

Cost of fixed overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$12,850

Volume of production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,000 units

Instructions

1. Compute the labor efficiency variance.

2. Compute the overhead spending variance.

3. Compute the overhead volume variance.