Logistics Solutions provides order fulfillment services for

dot.com merchants. The company maintains warehouses that stock items

carried by its

dot.com clients. 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, $180,000$ items were shipped to customers using $7,700$ direct labor$-$hours. The company incurred a total of

$$26,180$ in variable overhead costs.

According to the company's standards, $0\mathrm{.}03$ direct labor$-$hours are required to fulfill an order for one item and the variable overhead

rate is $$3\mathrm{.}45$ per direct labor$-$hour.

Required:

What is the standard labor$-$hours allowed $($SH$)$ to ship $180,000$ items to customers?

What is the standard variable overhead cost allowed $($SH $SR)$ to ship $180,000$ items to customers?

What is the variable overhead spending variance?

What is the variable overhead rate variance and the variable overhead efficiency variance?

$($For requirements $3$ and $4,$ indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for

no effect $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values. Do not round intermediate calculations.$)$