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Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $3, 600, 000 Cost of goods sold Direct materials $960, 000 Direct labor 240, 000 Machinery repairs (variable cost) 64, 000 Depreciation-Plant equipment (straight-line) 315, 000 Utilities ($48,000 is variable) 198, 000 Plant management salaries 230,000 2, 007,090 Gross profit 1, 593, 090 Selling expenses Packaging 80, 000 Shipping 112, 000 Sales salary ( fixed annual amount) 260, 000 452, 090 General and administrative expenses Advertising expense 133, 000 Salaries 251, 000 Entertainment expense 100,000 484, 090 Income from operations $ 657, 090Phoenix Company's actual income statement for 2019 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (19,000 units) $4, 338, 000 Cost of goods sold Direct materials $1, 156, 000 Direct labor 293, 000 Machinery repairs (variable cost) 67,000 Depreciation-Plant equipment (straight-line) 315, 000 Utilities ( fixed cost is $147,500) 203, 750 Plant management salaries 240, 000 2, 274, 750 Gross profit 2, 063, 250 Selling expenses Packaging 92, 000 Shipping 126, 000 Sales salary (annual) 276, 000 494, 090 General and administrative expenses Advertising expense 141, 000 Salaries 251, 000 Entertainment expense 103, 000 495, 000 Income from operations $1, 074, 2504) With respect to variable overhead, calculate the following relating to their operating results for the year. a) Remember Phoenix Company applies overhead (variable and xed) based on direct labor hours. Therefore, the total quantity of input (hours) for variable overhead will equal those of direct labor. Calculate an average variable overhead actual rate as variable overhead expenses divided by direct labor hours (actual). Show 2 decimals. Use this as your actual rate, AR, to calculate spending and efciency variance below. b) Give one possible reason for a favorable variable overhead spending variance. 0) Give one possible reason for an unfavorable variable overhead efciency variance