Calgary Paper Company produces paper for photocopiers. The company has developed standard overhead rates based on a monthly capacity of 90,000 direct-labor hours as follows:

Standard costs per unit (one box of paper):

Variable overhead (2 direct-labor hours @ $4)................$8

Fixed overhead (4 direct-labor hours @ $12).....................$48

Total.............................................................................$56

During April, 25,000 units were scheduled for production: however, only 20,000 units were actually produced. The following data relate to April.

1. Actual direct-labor cost incurred was $1,782,000 for 99,000 actual hours of work.
2. Actual overhead incurred totaled $1,435,200, of which $475,200 was variable and $960,000 was fixed.

Required:

Prepare two exhibits similar to Exhibit 11-6 and Exhibit 11-8, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.

Exhibit 11-6: https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/hilton_11e/chapter_11/exhibit_11-6.png

Exhibit 11-8: https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/hilton_11e/chapter_11/exhibit_11-8.png

1. Variable-overhead spending variance.
2. Variable-overhead efficiency variance.
3. Fixed-overhead budget variance.
4. Fixed-overhead volume variance.