E$11\mathrm{.}25$

Overhead variances: manufacturer LO $11\mathrm{.}5$

Able Control Ltd$,$ a manufacturer of electrical safety switches, uses a standard costing system. The standard manufacturing overhead costs per switch are based on direct labour hours and are as follows:

Variable overhead $(5$ hours @ $$24$ per hour$)$

$$120$

Fixed overhead $(5$ hours @ $$36$ per hour$)*$

$180$

Total overhead

$$300$

$*$ Based on capacity of $300000$ direct labour hours per month.

The following information is available for October:

$56000$ switches were produced, although $60000$ switches were budgeted.

$275000$ direct labour hours were worked at a total cost of $$7650000.$

Variable overhead costs were $$7020000.$

Fixed overhead costs were $$11250000.$

Required

Calculate the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances for October. Indicate whether each variance is favourable or unfavourable.