Taylor Inc. uses a standard cost system. The company has the following results for the current period:

	Budget			Actual
Fixed overhead	$	160,000		$	160,000
Units		6,500	units		6,000	units
Direct labour-hours (DLH)		13,333	hours		12,500	hours
Standard quantity of DLH per unit		2.0152	hours

Variable overhead is applied at $27.50 per direct labour-hour. Actual variable overhead was $310,600.

Required:

1.	Compute the fixed overhead budget variance and the volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

2.

Because the actual overhead and the budgeted overhead are the same the volume variance is 0. True or false? Show calculations.

	True
	False

3.	Compute the total variable overhead variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)