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Skip Dash (SD) operates a meal home-delivery service. It has agreements with 25 restaurants to pick up and deliver meals to customers who phone or

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Skip Dash (SD) operates a meal home-delivery service. It has agreements with 25 restaurants to pick up and deliver meals to customers who phone or place online orders to SD. SD allocates variable and fixed overhead costs on the basis of delivery time. SD's owner obtains the following information for May overhead costs Skip Dash Actual Static Output (number of deliveries) 8,800 10,000 Hours per delivery 0.70 Hours of delivery time 5,720 Variable overhead cost per hour of delivery time $1.50 Variable overhead costs $10,926 Fixed overhead costs $38,600 $35,000 Required: 1. Calculate the rate and efficiency variances for SD's variable overhead in May. 2. Calculate the rate variance and production-volume variance for SD's fixed overhead in May. 3. Create a report that explains the overhead variance and suggest how the owner might manage SD's variable overhead differently from its fixed overhead costs

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