All - Star Fender uses a standard cast system and provide the following information: E (Click the icon to view the information.) All - Star Fender allocates manufacturing ovemead to production based on standard direct labor hours. All - Star Fender reported the following actual results for 2018: actual number of fenders produced, 20,000; actual variable overhead. $4.420: actual xed ovemead. $30,000: actual direct labor hours, 400. Read the Equirements. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efciency variance, xed ovemead cost variance, and xed overhead volume variance. Begin with the variable ovemead cost and efciency variances. Select the required formulas, compute the variable ovemead cost and efciency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; A0 = actual quantity; FOH = xed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance = = I VOH efciency variance = = I Now compute the xed ovemead cost and volume variances. Select the required formulas, compute the xed ovemead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; A0 = actual quantity; FOH = xed overhead; so = standard cost; SQ = standard quantity.) Formula Variance FOH cost 0 Data Table variance 2 (AQ - SQ) x SC I = l FOH volume ' 2 AQ - SQ x SC = 400 U variance ( I I I Static budget variable Requirement 2. Explain why the variances are favorable or unfavorable. overhead 3 2,300 Static budget xed The variable ovemead cost variance is E because management spent V than budgeted for the actual production. overhead $3,000 Static budget direct The variable ovemead efciency variance is V because management used Y direct labor hours than standard and variable ovemead is applied (incurred) based on direct labor. labor hours 575 hours Static budget number of The xed overhead cost variance is S because management spent El than the amount budgeted for xed overhead. units 23,000 units _ _ _ Standard direct labor hours per The xed ovemead volume variance Is |:| because management allocated V xed overhead to ]ODS than was budgeted. hours [1025 fender Print Done