Simpson Manufacturing has the following standard cost sheet for one of its products:

		Total
Direct materials	5 pounds at $2 per pound	$ 10
Direct labor	2 hours at $25 per hour	50
Variable factory overhead	2 hours at $5 per hour	10
Fixed factory overhead	2 hours at $20 per hour	40
Cost per unit		$ 110

The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory overhead rate based on a practical capacity of 400 units of the product.

Simpson has the following actual operating results for the year just completed:

Units manufactured	390
Direct materials purchased and used	1,950	pounds	$ 21,450
Direct labor incurred	900	hours	24,300
Variable factory overhead incurred			5,760
Fixed factory overhead incurred			15,800

Before closing the periodic accounts, the (standard cost) entries in selected accounts follow:

Account	Debit (total)	Credit (total)
Work-in-process inventory	$ 198,000	$ 149,640
Finished goods inventory	149,640	126,690
Cost of goods sold	126,690

3. Compute the following factory overhead cost variances using three-variance analysis:

a. Overhead spending variance.

b. Overhead efficiency variance.

c. Fixed overhead production volume variance.