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Diekow Productions manufactured and sold 1,000 products at $11,000 each during the past year. At the beginning of the year, production had been set at
Diekow Productions manufactured and sold 1,000 products at $11,000 each during the past year. At the beginning of the year, production had been set at 1,200 products; direct materials standards had been set at 100 pounds of direct materials at $2 per pound for each product produced. During the year, the company purchased and used 98,000 pounds of direct materials; the cost was $2.04 per pound. At the beginning of last year, Diekow Productions set variable overhead standards of 10 machine hours at a rate of $10 per hour for each product produced. During the year, 10,800 machine hours were used at a cost of $10.20 per hour. Calculate Diekow Production's variable overhead spending and efficiency variances for the year. Variable overhead spending variance: $__________ (Favorable / Unfavorable / No effect) Variable overhead efficiency variance: $__________ (Favorable / Unfavorable / No effect)
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