E9-15 Calculating Variable Manufacturing Overhead Variances [LO 9-5]

See Clear Company manufactures clear plastic CD cases. It applies variable overhead based on the number of machine hours used. Information regarding See Clears overhead for the month of December follows:

	Standard Quantity	Standard Rate	Standard Unit Cost
Variable manufacturing overhead	0.1 machine hours per case	$0.90 per machine hour	$ 0.09

During December, See Clear had the following actual results:

Number of units produced and sold		600,000
Actual variable overhead cost	$	58,000
Actual machine hours		64,000

Required: Compute See Clears variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for Favorable/Overapplied and "U" for Unfavorable/Underapplied.)