Good Deal, Inc. uses a standard cost system and provides the following information.

$($Click the icon to view the information.$)$

Good Dealallocates manufacturing overhead to production based on standard direct labor hours. Good Dealreported the followin

$$2,400$ actual fixed overhead, $$2,700$ actual direct labor hours, $1,300.$

Read the requirements.

Requirement $1.$ Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost

unfavorable $($U$).($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost;$SQ=s$

$($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH $=$ fixed overhead; $SC=$ standard cost; $SQ=$ standard quantity.$)$

Formula

Requirement $2.$ Explain why the variances are favorable or unfavorable.

The variable overhead cost variance is

The variable overhead efficiency variance is

The fixed overhead cost variance is

The fixed overhead volume variance is

because the actual cost per direct labor hour was

because management used

because the total fixed overhead cost was

than the amount budgeted for total fixed overhead.

because total fixed overhead cost allocated to units was

than the total budgeted fixed overhead cost.$($Click the icon to view the information.$)$

$$2,400$; actual fixed overhead, $$2,700$; actual direct labor hours, $1,300.$

Read the requirements.

Requirement $1.$ Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

unfavorable $($U$).($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost;$SQ=$sta

Formula

Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and $v$

$($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost; $SQ=$ standard quantity.$)$

Formula

Variance

Requirement $2.$ Explain why the variances are favorable or unfavorable.

The variable overhead cost variance is

because the actual cost per direct labor hour was

than the standard

The variable overhead efficiency variance is favorable

because management used

direct labor hours than standard a

The fixed overhead cost variance is

because the total fixed overhead cost was

The fixed overhead volume variance is

because total fixed overhead cost allocated to units was

Data table

Static budget variable overhead

Static budget fixed overhead

Static budget direct labor hours

Static budget number of units

Standard direct labor hours

$$1,200$

$$1,600$

$800$ hours

$400$ units

$2$ hours per unit