Easy Meals Now (EMN) operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who place orders on EMN's website. EMN allocates variable and fixed overhead costs on the basis of delivery time. EMN's owner, Dan Bennett, obtains the following information for May 2020 overhead costs:

Data Table

	Actual Results	Static Budget
Output units (number of deliveries)	8,700	9,000
Hours per delivery		0.70
Hours of delivery time	5,670
Variable overhead cost per hour of delivery time		$1.75
Variable overhead costs	$10,773
Fixed overhead costs	$38,700	$37,800

Requirement 1. Compute spending and efficiency variances for MMM's variable overhead in May 2020.

Begin by calculating the following amounts for the variable overhead. (Round your answer to the nearest dollar.)

	Actual costs incurred	Actual input budgeted rate	Flexible Budget
Variable OH	$	$	$

Now compute the spending and efficiency variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).)

	Spending Variance		Efficiency Variance
Variable OH		U		F

Requirement 2. Compute the spending variance and production-volume variance for MMM's fixed overhead in May 2020.

Begin by determining the formula then computing the fixed OH cost per hour of delivery time. (Round your answer to the nearest dollar.)

Budgeted fixed overhead costs		Budgeted delivery hours	=	Fixed OH cost per hour of delivery time
$			=	$

Now calculate the following amounts for the fixed overhead.

	Actual costs incurred	Same budgeted Lump sum regardless of output level	Allocated overhead
Fixed OH	$	$	$

Now compute the spending variance and production-volume variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).)

	Spending Variance		Production-Volume variance
Fixed OH		U		U

Requirement 3. Comment on MMM's overhead variances and suggest how Sam Nelson might manage MMM's variable overhead differently from its fixed overhead costs.

The favorable efficiency variance for variable overhead costs results from more efficient use of the cost allocation baseeach delivery takes _____ hours versus a budgeted 0.70 hours.