Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) Best allocates manufacturing overhead to production based on standard direct labor hours. Best reported the following actual results for 2024: actual number of units produced, 1,000; actual variable overhead, $3,800; actual fixed overhead, $3,500; actual direct labor hours, 1,400. Read the requirements. Data table - Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variance Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead unfavorable (U). (Abbreviations used: AC = actual cost, AQ = actual quantity, FOH = fixed overhead; SC = standard cost; S Formula Variance Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,300 $3,450 1,150 hours 575 units 2 hours per unit VOH cost variance VOH efficiency variance = Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cos unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; S FOH cost variance FOH volume variance Formula = = Variance Print Done The variable overhead cost variance is Requirement 2. Explain why the variances are favorable or unfavorable. because the actual cost per direct labor hour was than the standard cost per direct labor hour. because management used The variable overhead efficiency variance is The fixed overhead cost variance is because the total fixed overhead cost was direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. than the amount budgeted for total fixed overhead.