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Coronado, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as

Coronado, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

Standard Price Standard Quantity Standard Cost

Direct materials

$3 per yard 2.00 yards $6.00

Direct labor

$14 per DLH 0.75 DLH 10.50

Variable overhead

$3.20 per DLH 0.75 DLH 2.40

Fixed overhead

$3 per DLH 0.75 DLH 2.25
$21.15

Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November. The company purchased 82,400 yards of fabric and used 94,000 yards of fabric during the month. Fabric purchases during the month were made at $2.80 per yard. The direct labor payroll ran $464,275, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of 604,000 shirts, using 454,000 direct labor hours. Though the budget for November was based on 45,900 shirts, the company actually produced 42,400 shirts during the month.

Variable Overhead Budget

Annual Budget

Per Shirt

NovemberActual

Indirect material

$445,000 $1.20 $49,300

Indirect labor

299,000 0.75 30,900

Equipment repair

201,000 0.30 20,600

Equipment power

48,000 0.15 6,900

Total

$993,000 $2.40 $107,700

Fixed Overhead Budget

Annual Budget

NovemberActual

Supervisory salaries

$256,000 $21,000

Insurance

346,000 27,300

Property taxes

80,000 6,900

Depreciation

325,000 26,400

Utilities

210,000 19,900

Quality inspection

283,000 24,500

Total

$1,500,000 $126,000

(d) Calculate the fixed overhead spending variance for November. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Fixed overhead spending variance $enter the fixed overhead spending variance in dollars select an option FavorableNot ApplicableUnfavorable

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