Pizzazz Pizza Inc.s activity based flexible budget is as follows:

PIZZAZZ PIZZA, INC.
Monthly Flexible Overhead Budget
Budgeted Cost	Level of Activity
Cost Pool I (cost driver: process hours)	6,800				8,300				9,800
Indirect material:
Nonstick cooking spray	$	12,800			$	15,800			$	18,800
Foil		2,800				3,300				3,800
Other paper products.		2,800				3,300				3,800
Miscellaneous supplies		6,800				8,300				9,800
Indirect labor: maintenance		4,800				5,800				6,800
Utilities:
Electricity		3,800				4,550				5,300
Natural gas		1,800				2,050				2,300
Total of cost pool I	$	35,600			$	43,100			$	50,600
Cost Pool II (cost driver: production runs)		16				20				24
Indirect labor:
Inspection	$	3,000			$	4,100			$	5,200
Setup		3,800				5,300				6,800
Total of cost pool II	$	6,800			$	9,400			$	12,000
Cost Pool III (cost driver: new Pizzas tested)		28				38				48
Test kitchen	$	2,000			$	2,600			$	2,480
Total of cost pool III	$	2,000			$	2,600			$	2,480
Cost Pool IV (cost driver: pounds of material handled)		28,000				38,000				48,000
Material handling	$	2,800			$	3,800			$	4,800
Total of cost pool IV	$	2,800			$	3,800			$	4,800
Cost Pool V (facility level costs)
Indirect labor: production supervisors	$	6,800			$	6,800			$	6,800
Depreciation: plant and equipment		900				900				900
Insurance and property taxes		500				500				500
Total of cost pool V	$	8,200			$	8,200			$	8,200
Total overhead cost	$	55,400			$	67,100			$	78,080

Pizzazzs activity for September is as follows:

Process Hours		8,300
Production Runs		24
New Pizza combinations tested		38
Direct material handled (in pounds)		48,000

Required:

1. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance.

1. a. Indirect material
2. b. Utilities
3. c. Inspection
4. d. Test kitchen
5. e. Material handling
6. f. Total overhead cost

2. Compute the variance for setup cost during the month, assuming that the actual setup cost was $4,600: Using the activity-based flexible budget. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)