Quality, Inc. uses a standard cost system and provides the following information.

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direct labor hours, $1,800.$

Read the requirements.

Requirement $1.$ Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost; $SQ=$ standard quantity; VOH$=$ variable overhead. $)$

$AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost; $SQ=$ standard quantity.$)$

Requirement $2.$ Explain why the variances are favorable or unfavorable.

The variable overhead cost variance is

because the actual cost per direct labor hour was

than the standard cost per direct labor hour.

The variable overhead efficiency variance is

because management used

direct labor hours than standard and variable overhead is applied $($incurred$)$ based on direct labor.

The fixed overhead cost variance is

because the total fixed overhead cost was

than the amount budgeted for total fixed overhead.

The fixed overhead volume variance is

because total fixed overhead cost allocated to units was

than the total budgeted fixed overhead cost.Inc. uses a standard cost system and provides the following information.

LOADING...$($Click the icon to view the$$ information.$)$

Quality allocates manufacturing overhead to production based on standard direct labor hours. Quality reported the following actual results for $2024$: actual number of units$$ produced, $1$ comma $000$; actual variable$$ overhead, $ $5$ comma $000$; actual fixed$$ overhead, $ $3$ comma $500$; actual direct labor$$ hours, $1$ comma $800.$

Read the requirementsLOADING....

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Part $1$

Requirement $1.$ Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.