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

Direct material (20 Ibs. @ $2.50 per Ib.)		$	50.00
Direct labor (10 hrs. @ $22.00 per hr.)			220.00
Factory variable overhead (10 hrs. @ $4.00 per hr.)			40.00
Factory fixed overhead (10 hrs. @ $1.60 per hr.)			16.00
Standard cost		$	326.00

The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			70%				75%				80%
Budgeted output (units)			35,000				37,500				40,000
Budgeted labor (standard hours)			350,000				375,000				400,000
Budgeted overhead (dollars)
Variable overhead		$	1,400,000			$	1,500,000			$	1,600,000
Fixed overhead			600,000				600,000				600,000
Total overhead		$	2,000,000			$	2,100,000			$	2,200,000

During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,375,000
Fixed overhead costs			628,600
Total overhead costs		$	2,003,600

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 Flexible Budget Standard Cost (VOH applied) SH AH AVR AH SVR SVR Vari able overhead spending variance Variable overhead efficiency variance Total variable overhead cost variance Unfavorable 0Favorable Favorable 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. (Round "Rate per unit" to 2 decimal places.) Actual Fixed OH cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) SH SFR Fixed overhead spending variance Fixed overhead volume variance Total fixed overhead cost variance O Unfavorable Unfavorable nfavorable