P8-12. Two-Variance Overhead Analysis

The standard specifications for an electric motor manufactured by XYZ Electric Co. follow:

Factory overhead rates are based on a normal 70% capacity and use the following flexible budget:

The actual production was 2,500 motors, and factory overhead costs totaled $29,750.

REQUIRED:

Calculate the factory overhead variances using the two-variance method and the diagram format.

Standard cost per unit: $1.00 variable +$2.38 fixed =$3.38