11.25 gag; Ltd is a manufacturer of electrical switches, and uses a standard costing system. The standard manufacturing overhead costs per switch are based on direct labour hours and are as follows: Variable overhead (5 hours @ $36 per hour) $180 Fixed overhead (5 hours @ $54 per hour)* Total overhead $450 * Based on capacity of 300 000 direct labour hours per month. The following information is available for October: - 56 000 switches were produced, although 60 000 switches were budgeted. - 275 000 direct labour hours were worked at a total cost of $11 475 000. - Variable overhead costs were $10 530 000. - Fixed overhead costs were $16 875 000. Required: Calculate the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances for October. Indicate whether each variance is favourable or unfavourable. 11.32 thaggStationery Company manufactures cardboard folders. The company has developed standard overhead rates based on a monthly capacity of 180 000 direct labour hours (DLH) )as follows: Standard costs per unit( (one box of folders): )- Variable overhead (2 hours @ $6 per DLH) I Fixed overhead (2 hours @ $10 per DLH) During April, 90 000 units were budgeted for production; however, only 80 000 units were produced. The following data relate to April: - Actual direct labour cost incurred was $3 135 000 for 165 000 actual hours of work. - Actual overhead incurred totalled $2 743 000, of which $1 023 000 was variable and $1 720 000 was fixed. Required: Prepare two exhibits, similar to Exhibits 11.5 and 11.6, showing the following variances. State whether each variance is favourable or unfavourable