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Requirements

Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.

Explain why the variances are favorable or unfavorable.

Requirement $1.$ Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.

Begin by selecting the formulas needed to compute the variable overhead $($VOH$)$ and fixed overhead $($FOH$)$ variances, and then compute each variance amount.

$($Actual cost $-$ Standard cost