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E8-17 Calculating factory overhead: two variances Dakota Manufacturing Inc. normally produces 10,000 units of product A each month. Each unit requires 4 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are $10 and $5 per unit, respectively. Cost and production data for June follow: Production for the month.........................................11,000 units Direct labor hours used ...........................................42,000 hours Factory overhead incurred for: Variable costs ...................................................$48,000 Fixed costs ......................................................$103,000 a.Calculate the flexible-budget variance. b.Calculate the production-volume variance. c.Was the total factory overhead under- or over applied? By what amount? E8-16 Calculating factory overhead: two variances Montana Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are $5 and $3 per unit, respectively. Cost and production data for May follow Production for the month.........................................9,000 units Direct labor hours used ...........................................18,500 hours Factory overhead incurred for: Variable costs ...................................................$28,500 Fixed costs ......................................................$52,000a .Calculate the flexible-budget variance .b.Calculate the production-volume variance. c.Was the total factory overhead under- or over applied? By what amount