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

Direct material (20 Ibs. @ $3.30 per Ib.)		$	66.00
Direct labor (15 hrs. @ $6.00 per hr.)			90.00
Factory variable overhead (15 hrs. @ $2.80 per hr.)			42.00
Factory fixed overhead (15 hrs. @ $1.20 per hr.)			18.00
Standard cost		$	216.00

The $4.00 ($2.80 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 58,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			70%				75%				80%
Budgeted output (units)			40,600				43,500				46,400
Budgeted labor (standard hours)			609,000				652,500				696,000
Budgeted overhead (dollars)
Variable overhead		$	1,705,200			$	1,827,000			$	1,948,800
Fixed overhead			783,000				783,000				783,000
Total overhead		$	2,488,200			$	2,610,000			$	2,731,800

During the current month, the company operated at 70% of capacity, employees worked 575,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,624,000
Fixed overhead costs			866,000
Total overhead costs		$	2,490,000

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. Standard Cost (VOH applied) Actual Variable OH Cost Flexible Budget 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. Actual Fixed OH cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied)