Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs).

Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2020, each suit is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $14. The budgeted number of suits to be manufactured in June 2020 is 1,080. Actual variable manufacturing overhead costs in June 2020 were $66,265 for 1,140 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,570.

1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.

2. Comment on the results.

Requirement 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.

Begin by computing the following amounts for the variable manufacturing overhead.

	Actual Input Qty.
Actual Costs			Allocated
Incurred	Budgeted Rate	Flexible Budget	Overhead