Hellier Contractors paints interiors of residences and commercial structures. The firm's management has established cost standards per 100 square feet of area to be painted: Direct material ($18 per gallon of paint): $1.50 (so, 1 gallon should paint 1,200 square feet) Direct labor: Variable overhead (based on DLH): Fixed overhead (based on DLH): 2.00 0.60 1.25 (based on 600,000 square feet per month) Management has determined that 400 square feet can be painted by the average worker each hour. During May, the company painted 600,000 square feet of space and incurred the following costs: Direct material (450 gallons purchased and used): Direct labor (1,475 hours): Variable overhead: Fixed overhead: Hints: $ 8,300.00 12,242.50 3,480.00 7,720.00 1) Note that standards are given for a 100 sq. ft. job. BUT, also note that the problem tells you a typical worker can paint 400 sq. ft. in ONE HOUR. So, the predetermined OH rates are either, VOH, .60 per 100 sq. ft. or 2.40 per 400 sq. ft. or per standard hour of work allowed for the actual work done and, FOH, 1.25 per 100 sq. ft. or 5.00 per 400 sq. ft. or standard hour of work allowed. Also, materials standard is 1/12 of a gallon for 100 sq. ft. ($18 per gallon but the standard price for the 100 sq. ft is $1.50 18/12). 2) The FOH budget and the predetermined rate are specified at a typical/normal 600,000 sq. ft. month. So, how many hours of work we are allowed or expect in a month? Note: 1500 hours. Were we efficient this month? If yes, both Labor and VOH efficiency variances must be (F), if not, they must be (U). 3) Note that we actually painted 600,000 sq. ft. this month - exactly what we planned. So, what is the FOH Volume variance when you actually work exactly what you plan? By the way, what was the FOH budget that led to the 1.25 per 100 sq. ft. or 5.00 per hour (400 sq. ft.) predetermined rate? 4) Note that overhead rates (both variable and fixed) are based on direct labor hours or 400 sq. ft. of painting since a painter paints 400 sq. ft. per hour. So, the VOH spending variance will depend on the difference of actual VOH spending and the VOH rate applied to the actual base (i.e., labor hours) used. The VOH efficiency variance will be based on the difference between actual DL hours used and the DL hours that should be used to paint the 600000 sq. ft.