Modern Mode Clothing is a manufacturer of designer suits. For June $2020,$ each suit is budgeted to take $3$ labor$-$hours. The budgeted number of suits to be manufactured in June $2020$ is $1,140.$ Modern Mode 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 $2020$ are budgeted, $$54,720,$ and actual, $$63,920.$ In June $2020$ there were $1,160$ suits started and completed. There were no beginning or ending inventories of suits.

Requirements

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

Compute the production$-$volume variance for June $2020.$ What inferences can Modern Mode Clothing draw from this variance?

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

Begin by computing the following amounts for the fixed manufacturing overhead.

$\backslash$table$[[,\backslash$table$[[$Same Budgeted$],[$Lump Sum$]],\backslash$table$[[$Flexible Budget:$],[$Same Budgeted$],[$Lump Sum$]],],[\backslash$table$[[$Actual Costs$],[$Incurred$]],\backslash$table$[[$Regardless of$],[$Output Level$]],\backslash$table$[[$Regardless of$],[$Output Level$]],\backslash$table$[[$Allocated$],[$Overhead$]]]]$