P$11\mathrm{.}32$

Straightforward overhead variances: manufacturer LO $11\mathrm{.}5$

SmartBoard Limited manufactures cardboard filing boxes. The company has developed standard overhead rates based on a monthly capacity of $180000$ direct labour hours $($DLH$)$ as follows:

Standard costs per unit $($one batch of boxes$)$:

$$

Variable overhead $(2$ hours @ $$9$ per DLH$)$

$$18$

Fixed overhead $(2$ hours @ $$15$ per DLH$)$

$30$

Total

$$48$

During April, $90000$ units were budgeted for production; however, only $80000$ units were produced. The following data relate to April:

Actual direct labour cost incurred was $$4702500$ for $165000$ actual hours of work.

Actual overhead incurred totalled $$4114500,$ of which $$1534500$ was variable and $$2580000$ was fixed.

Required

Prepare two exhibits, similar to Exhibits $11\mathrm{.}5$ and $11\mathrm{.}6,$ showing the following variances. State whether each variance is favourable or unfavourable.

variable overhead spending variance

variable overhead efficiency variance

fixed overhead budget variance

fixed overhead volume variance