Question #1

At the beginning of the year, Blue Bird Manufacturing estimated that its annual variable factory overhead would be $405,000, and its fixed factory overhead would be $891,000. The company's payroll consisted of 15 direct labor employees, and each was expected to work 1,800 direct labor hours. Blue Bird applies overhead to products based on direct labor hours. Each finished unit produced by the company is anticipated to require three direct labor hours. Actual production and cost information for the year is as follows:
	Total units produced	8,900
	Actual variable overhead	$ 395,000
	Actual fixed overhead	$ 910,000
	Actual labor hours	26,900
(a)	Compute the variable overhead variances..
(b)	Compute the fixed overhead variances.
Question #2 Custom Clubs produces handmade golf clubs. The process is labor intensive. The speed at which a club can be built depends on the skill level of the individual worker. Management has established a standard of 2 labor hours per club. The standard wage rate is $12 per hour. During a recent month, 2,500 custom clubs were produced. Management was pleased that only 4,900 labor hours were worked; however, total wages amounted to $63,700. Compute the total variance for labor, and determine how much is related to rate and efficiency components.