Flexible Budgets - Cost Variances Hals Heating produces furnaces for commercial buildings. The standard price for a heating element part is $40. A standard quantity of 3 heating elements is expected to be used in each furnace produced. During January, Hals used 980 elements, with a cost of $38 each, to produce 320 furnaces. For direct labor, Hals established a standard of 35 hours per furnace. The standard rate is $18 per hour. A total of 10,000 direct labor hours were worked during January, at a cost of $190,000, to produce 320 furnaces. The variable overhead is applied at a standard rate of $15 per direct labor hour. Variable overhead costs totaled $190,000 for the month. A total of 10,000 direct labor hours were worked to produce 320 furnaces. The fixed overhead costs is applied to products based on direct labor hours. Information for the month of January appears as follows. Hals expected to produce and sell 300 units for the month.

Budgeted fixed overhead costs $231000

Budgeted direct labor hours 10500

Standard cost per direct labor hour $22

Standard direct labor hours per unit 35

Actual production 320 units

Actual fixed overhead costs $217000

a. Calculate the materials price and quantity variance.

b. Calculate the labor rate & efficiency variance.

c. Calculate the variable overhead spending and efficiency variance.

d. Calculate the fixed overhead spending and volume variance.

Label each variance as favorable or unfavorable.