Logistics Solutions provides order fulfillment services fordot.commerchants. The company maintains warehouses that stock items carried by itsdot.comclients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.

In the most recent month, 155,000 items were shipped to customers using 6,000 direct labor-hours. The company incurred a total of $17,400 in variable overhead costs.

According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.00 per direct labor-hour.

Required:

1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 155,000 items? How much does this differ from the actual variable overhead cost?(Round labor-hours per item and overhead cost per hour to 2 decimal places.)

Number of items shipped

Standard DLH per item

Total Direct Labor Hours Allowed

Standard Variable Overhead Cost per Hour

Total Standard Variable Overhead Cost

Actual Variable Overhead Cost incurred

Total standard variable overhead cost

Total variable overhead variance

2. Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)