Question: Variable Overhead Variances Dallin Tax Company considers 8,000 direct labor hours or 400 tax returns its normal monthly capacity. Its standard variable overhead rate is $40 per direct labor hour. During the current month, $308,500 of variable overhead cost was incurred in working 7,400 direct labor hours to produce 360 units of product. Determine the following variances and indicate whether.

Each is favorable or unfavorable:

A. Variable overhead spending

B. Variable overhead efficiency