Required information

[The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year.

Direct material (30 Ibs. @ $2.30 per Ib.)		$	69.00
Direct labor (20 hrs. @ $4.30 per hr.)			86.00
Variable overhead (20 hrs. @ $2.30 per hr.)			46.00
Fixed overhead (20 hrs. @ $1.20 per hr.)			24.00
Total standard cost		$	225.00

The $3.50 ($2.30 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 69,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			55%				60%				65%
Budgeted output (units)			37,950				41,400				44,850
Budgeted labor (standard hours)			759,000				828,000				897,000
Budgeted overhead (dollars)
Variable overhead		$	1,745,700			$	1,904,400			$	2,063,100
Fixed overhead			993,600				993,600				993,600
Total overhead		$	2,739,300			$	2,898,000			$	3,056,700

During the current month, the company operated at 55% of capacity, employees worked 731,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,710,000
Fixed overhead costs			1,031,500
Total overhead costs		$	2,741,500

AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate

1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. 3. Compute the controllable variance.

Complete this question by entering your answers in the tabs below.

Compute the variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per unit" to 2 decimal places.)

Actual Variable OH Cost			-1	Flexible Budget			-1	Standard Cost (VOH applied)
AH	x	AVR		AH	x	SVR		SH	x	SVR
	x	0			x				x
				2
-1
Variable overhead spending variance				$0
Variable overhead efficiency variance				0
Total variable overhead cost variance

Compute the variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per unit" to 2 decimal places.)

Actual Variable OH Cost			-1	Flexible Budget			-1	Standard Cost (VOH applied)
AH	x	AVR		AH	x	SVR		SH	x	SVR
	x	0			x				x
				2
-1
Variable overhead spending variance				$0
Variable overhead efficiency variance				0
Total variable overhead cost variance

Compute the controllable variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

Controllable Variance
Variable overhead spending variance
Variable overhead efficiency variance
Fixed overhead spending variance
Controllable variance