Man's Clothing is a manufacturer of designer suits. For June 2016, each suit is budgeted to take 3 labor-hours. The budgeted number of suits to be manufactured in June 2016 is 1,160. Man's Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2016 are budgeted, $52,200, and actual, $63,870. In June 2016 there were 1,200 suits started and completed. There were no beginning or ending inventories of suits.

Requirements

1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.

2. Compute the production-volume variance for June 201. What inferences can the clothing company draw from this variance?