OH variances Nelson Co. manufactures a product that requires 3.5 machine hours per unit. The variable and fixed overhead rates were computed using expected capacity of 230,400 units (produced evenly throughout the year) and expected variable and fixed overhead costs, respectively, of $3,225,600 and $5,644,800. In October, Nelson manufactured 19,040 units using 66,880 machine hours. October variable overhead costs were $264,000; fixed overhead costs were $471,200. a. What are the standard variable and fixed overhead rates?

Standard VOH rate		per MH
Standard FOH rate		per MH

b. Compute the variable overhead variances. Note: Do not use a negative sign with your answer.

VOH spending variance		FavorableUnfavorableNeither favorable or unfavorable
VOH efficiency variance		FavorableUnfavorableNeither favorable or unfavorable
Total VOH variance		FavorableUnfavorableNeither favorable or unfavorable

c. Compute the fixed overhead variances. Note: Do not use a negative sign with your answer.

FOH spending variance		FavorableUnfavorableNeither favorable or unfavorable
FOH volume variance		FavorableUnfavorableNeither favorable or unfavorable
Total FOH variance		FavorableUnfavorableNeither favorable or unfavorable