Overhead Variances

At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products:

Direct materials (4 lbs. @ $2.80) $11.20

Direct labor (2 hrs. @ $18.00) $36.00

FOH (2 hrs. @ $5.20) $10.40

VOH (2 hrs. @ $0.70) $1.40

Standard cost per unit $59.00

Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows:

Units produced: 91,100

Direct labor: 158,900 hours at $18.50

FOH: $926,000

VOH: $124,900

Required:

1.Compute the variable overhead spending and efficiency variances.

Spending variance

Efficiency variance $

2.Compute the fixed overhead spending and volume variances.

Spending variances

Volume variances$