1. Clean Water manufactures a water filter system. The cost standards developed by Clean Water appear below. Manufacturing overhead at Clean Water is applied to production based on standard direct labor-hours:

		Standard quantity per system	Standard cost per Kilogram or hour		Standard cost per system
	Direct materials	4 Kilograms	$3.25		$13.00
	Direct labor	1.4 hours	$11.00		15.40
	Variable overhead	1.4 hours	$4.00		5.60
	Fixed overhead	1.4 hours	$6.00		8.40
	Total standard cost per sucker				$42.40
The standards above were based on an expected annual volume of 8,000 systems Actual results for last year were as follows:
	Number of systems produced			8,200
	Direct labor-hours incurred			11,610
	Kilograms of direct materials purchased			38,300
	Kilograms of direct materials used in production			35,260
	Total cost of direct materials purchased			$126,390
	Total direct labor cost			$131,040
	Total variable overhead cost			$44,900
	Total fixed overhead cost			$67,080

Required:

Compute the following variances for Clear Water and comment on results.

A. Variable overhead efficiency variance.

B.Fixed overhead budget variance.

C.Fixed overheard volume variance