4. Overhead (OH) Variances (3.5pts): Better Than That Co. provided the following information regarding Factory Overhead (OH) from its flexible OH budget. The company has an operating capacity of 50,000 units and expects to operate at 70% of its productive capacity (i.e. expects to operate at 35,000 units, which is 70%*50,000):

	Operating Levels (% of capacity)
Flexible OH Budget:	60%	70%	80%	90%
Budgeted output (units)	30,000	35,000	40,000	45,000
Budgeted DL hours	24,000 DLh	28,000 DLh	32,000 DLh	36,000 DLh
Budgeted OH:
Variable OH	$78,000	$91,000	$104,000	$117,000
Fixed OH	$168,000	$168,000	$168,000	$168,000

During the current month, the company actually operated at 80% capacity and actually used 34,000 DL hours to produce 40,000 units. The following actual overhead costs were incurred:

Actual Variable OH: $119,000

Actual Fixed OH: $170,000

(0.5pts) Calculate the predetermined standard OH rate per DL hour for (HINT: remember to calculate these OH rates at the BUDGETED capacity):

Variable OH

Fixed OH

(0.5pts) Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

(0.5pts) Calculate the Variable OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

(0.5pts) Calculate the Variable OH Efficiency Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

(0.5pts) Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

(0.5pts) Calculate the Fixed OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

(0.5pts) Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U).