25. [The following information applies to the questions displayed below.] part 1: Sedona Company set the following standard costs for one unit of its product for this year.

Direct material (20 pounds @ $2.60 per pound)	$ 52.00
Direct labor (10 hours @ $8.00 per DLH)	80.00
Variable overhead (10 hours @ $4.40 per DLH)	44.00
Fixed overhead (10 hours @ $2.00 per DLH)	20.00
Standard cost per unit	$ 196.00

The $6.40 ($4.40 + $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,500 units, which is 75% of the factorys capacity of 54,000 units per month. The following monthly flexible budget information is available.

Flexible Budget	Operating Levels (% of capacity)
	70%	75%	80%
Budgeted production (units)	37,800	40,500	43,200
Budgeted direct labor (standard hours)	378,000	405,000	432,000
Budgeted overhead
Variable overhead	$ 1,663,200	$ 1,782,000	$ 1,900,800
Fixed overhead	810,000	810,000	810,000
Total overhead	$ 2,473,200	$ 2,592,000	$ 2,710,800

During the current month, the company operated at 70% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred.

Actual variable overhead	$ 1,625,000
Actual fixed overhead	854,000
Actual total overhead	$ 2,479,000

1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)

part 2:

[The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year.

Direct material (20 pounds @ $2.60 per pound)	$ 52.00
Direct labor (10 hours @ $8.00 per DLH)	80.00
Variable overhead (10 hours @ $4.40 per DLH)	44.00
Fixed overhead (10 hours @ $2.00 per DLH)	20.00
Standard cost per unit	$ 196.00

The $6.40 ($4.40 + $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,500 units, which is 75% of the factorys capacity of 54,000 units per month. The following monthly flexible budget information is available.

Flexible Budget	Operating Levels (% of capacity)
	70%	75%	80%
Budgeted production (units)	37,800	40,500	43,200
Budgeted direct labor (standard hours)	378,000	405,000	432,000
Budgeted overhead
Variable overhead	$ 1,663,200	$ 1,782,000	$ 1,900,800
Fixed overhead	810,000	810,000	810,000
Total overhead	$ 2,473,200	$ 2,592,000	$ 2,710,800

During the current month, the company operated at 70% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred.

Actual variable overhead	$ 1,625,000
Actual fixed overhead	854,000
Actual total overhead	$ 2,479,000

AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate

1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance.