Sedona Company set the following standard costs for one unit of its product for 2017.

Direct material (15 Ibs. @ $3.40 per Ib.)		$	51.00
Direct labor (10 hrs. @ $9.70 per hr.)			97.00
Factory variable overhead (10 hrs. @ $4.90 per hr.)			49.00
Factory fixed overhead (10 hrs. @ $2.00 per hr.)			20.00
Standard cost		$	217.00

The $6.90 ($4.90 + $2.00) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 59,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			65%				70%				75%
Budgeted output (units)			38,350				41,300				44,250
Budgeted labor (standard hours)			383,500				413,000				442,500
Budgeted overhead (dollars)
Variable overhead		$	1,879,150			$	2,023,700			$	2,168,250
Fixed overhead			826,000				826,000				826,000
Total overhead		$	2,705,150			$	2,849,700			$	2,994,250

During the current month, the company operated at 65% of capacity, employees worked 365,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,816,000
Fixed overhead costs			899,050
Total overhead costs		$	2,715,050

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

1. Compute the variable overhead spending and efficiency variances.

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
				$0
				0

2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable.

Actual Fixed OH cost			1	Fixed OH (Fixed Budgeted)			-1	Standard Cost (FOH applied)
				0
-1
				$0
				0

3. Compute the controllable variance.

Controllable Variance
Controllable variance