Problems Problem 11-35 Straightforward Overhead Variances (LO 11-5) Actual variable-overhead rate: $12 per direct-labor hour Budgeted fixed overhead $162,000 Manitoba Paper Company packages paper for photocopiers. The company has developed standard over- head rates based on a monthly practical capacity of 90,000 direct-labor hours as follows: Standard costs per unit (one box of paper): Variable overhead (2 hours @$11). Fixed overhead (2 hours @$18) Total $22 36 $58 During June, 4,500 units were scheduled for production; however, only 4,000 units were actually produced. The following data relate to June. 1. Actual overhead incurred totaled $247,000, of which $102,000 was variable and $145,000 was fixed. 2. Actual direct-labor cost incurred was $136,000 for 8,500 actual hours of work. Required: Prepare two exhibits similar to Exhibits 11-6 and 11-8 in the chapter, which show the fol- lowing variances. State whether each variance is favorable or unfavorable, where appropriate. 1. Variable-overhead spending variance. 2. Variable-overhead efficiency variance. 3. Fixed-overhead budget variance. 4. Fixed-overhead volume variance.