Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 120,000 liters at a budgeted price of $225 per liter this year. The standard direct cost sheet for one liter of the preservative follows Direct materials Direct labor (2 pounds $14) (0.5 hours $44) $28 22 Variable overhead is applied based on direct labor hours. The variable overhead rate is $120 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $20 per unit. All non manufacturing costs are fixed and are budgeted at $2.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity varlance for the year was $690,000 unfavorable. The following is the actual income statement in thousands of dollars) for the year. 525,938 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contribution margin Less fixed costa Fixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit 2,788 2,510 6,480 $11,228 $14, 160 2,650 1,330 $ 3,980 $10.180 Required: What are the fixed overhead price and production volume variances for Paynesville? (Enter your answers in whole dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Direct materials Direct labor (2 pounds 914) 70.5 hours 544) $20 22 Variable overhead is applied based on direct labor hours. The variable overhead rate is $120 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $20 per unit. All non-manufacturing costs are fixed and are budgeted at $2.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $690,000 unfavorable. The following is the actual income statement in thousands of dollars) for the year. $25,938 Sales revenue Loss variable costs Direct materials Direct labor Variable overhead Total variable conta Contribution margin Los fixed costs Pixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit 2,788 2,510 6.480 $11,778 $14,160 2,650 1.330 33.980 $10, 180 Required: What are the fixed overhead price and production volume variances for Paynesville? (Enter your answers in whole dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option) Fixed overhead price variano Fixed overhead production volume varianco
