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

Direct material (30 Ibs. @ $2.00 per Ib.)		$	60.00
Direct labor (20 hrs. @ $4.50 per hr.)			90.00
Variable overhead (20 hrs. @ $2.90 per hr.)			58.00
Fixed overhead (20 hrs. @ $1.20 per hr.)			24.00
Total standard cost		$	232.00

The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			60%				65%				70%
Budgeted output (units)			37,800				40,950				44,100
Budgeted labor (standard hours)			756,000				819,000				882,000
Budgeted overhead (dollars)
Variable overhead		$	2,192,400			$	2,375,100			$	2,557,800
Fixed overhead			982,800				982,800				982,800
Total overhead		$	3,175,200			$	3,357,900			$	3,540,600

During the current month, the company operated at 60% of capacity, employees worked 726,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	2,120,000
Fixed overhead costs			1,065,000
Total overhead costs		$	3,185,000

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.