olving for Unknowns, Overhead Analysis

Nuevo Company produces a single product. Nuevo employs a standard cost system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Nuevo used a standard overhead rate equal to $6.25 per direct labor hour. The rate was computed using expected activity. Budgeted overhead costs are $80,000 for 10,000 direct labor hours and $120,000 for 20,000 direct labor hours. During the past year, Nuevo generated the following data:

1. Actual production: 4,000 units
2. Fixed overhead volume variance: $1,750 U
3. Variable overhead efficiency variance: $3,200 F
4. Actual fixed overhead costs: $41,335
5. Actual variable overhead costs: $70,000

Required:

Instructions for parts 1, 2 and 4: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

1. Determine the fixed overhead spending variance. $fill in the blank 1

FavorableUnfavorableNot applicableUnfavorable

2. Determine the variable overhead spending variance. $fill in the blank 3

FavorableUnfavorableNot applicableUnfavorable

3. Determine the standard hours allowed per unit of product. Round your answer to two decimal places. fill in the blank 5 hours per unit

4. Assuming the standard labor rate is $9.50 per hour, compute the direct labor efficiency variance. $fill in the blank 6

FavorableUnfavorableNot applicableFavorable