QUESTION 4 (16 marks; 28.8 minutes) Nuevo Company produces a single product. Nuevo employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Nuevo used a standard overhead rate equal to R6.25 per direct labour hour. The rate was calculated using expected activity. Budgeted overhead costs are R80 000 for 10 000 direct labour hours and R120 000 for 20.000 direct labour hours. During the past year, Nuevo generated the following data: a. b. C. d. e. Actual production: 4 000 units Fixed overhead volume variance: R1 750 U Variable overhead efficiency variance: R3 200 F Actual fixed overhead costs: R41 335 Actual variable overhead costs: R70 000 Required: 4.1 Calculate the fixed overhead spending variance. (6) 4.2 Calculate the standard hours allowed per unit of product. 4.3 Calculate the variable overhead spending variance. (6) (4)