CH 8 HW st Question 3, EM8-20 (similar to) Part 1 of 6 Grand Fender uses a standard cost system and provide the following information: (Click the icon to view the information.) HW Score: 20%, 2 of 10 points Points: 0 of 2 Save Grand Fender allocates manufacturing overhead to production based on standard direct labor hours. Grand Fender reported the following actual results for 2024: actual number of fenders produced, 20,000; actual variable overhead, $5,800; actual fixed overhead, $34,000; actual direct labor hours, 480. Read the requirements. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (You may need to simply the formula based on the data provided. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) VOH cost variance VOH efficiency variance Formula Variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) FOH cost variance FOH volume variance Formula Requirement 2. Explain why the variances are favorable or unfavorable. = Variance The variable overhead cost variance is because management spent than budgeted for the actual production. The variable overhead efficiency variance is because management used The fixed overhead cost variance is because management spent direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. than the amount budgeted for fixed overhead. The fixed overhead volume variance is because management allocated fixed overhead to jobs than was budgeted. Choose from any list or enter any num unfavorable favorable Is and then continue to the next question. Requirement 2. Explain why the variances are favorable or unfavorable. The variable overhead cost variance is because management spent than budgeted for the actual production. The variable overhead efficiency variance is because management used The fixed overhead cost variance is because management spent The fixed overhead volume variance is because management allocated direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. than the amount budgeted for fixed overhead. fixed overhead to jobs than was budgeted. Choose from any list or enter any number in the input fields and then continue to ti less on. more Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,268 $30,240 756 hours 27,000 units 0.028 hours per fender