The following information relates to Brook, Inc.$\text{'}$s overhead costs for the month:

$($Click the icon to view the information.$)$

Begin by selecting the formulas needed to compute the variable overhead $($VOH$)$ and fixed overhead $($FOH$)$ variances, and then compute each variance amount.

Requirement $2.$ Explain why the variances are favorable or unfavorable.

The variable overhead cost variance is

The variable overhead efficiency variance is

because Brook actually spent

than budgeted.

because the actual hours used was

than budgeted.

The fixed overhead cost variance is

because Brook actually spent

than budgeted for fixed overhead.

The fixed overhead volume variance is

because Brook allocated

overhead to jobs than the budgeted fixed overhead amount.

Data table

Brook allocates manufacturing overhead to production based on

standard direct labor hours. Last month, Brook reported the

following actual results: actual variable overhead, $$10,300$; actual

fixed overhead, $$2,800$; actual production of $6,800$ units at $0\mathrm{.}30$

direct labor hours per unit. The standard direct labor time is $0\mathrm{.}25$

direct labor hours per unit $(1,300$ static direct labor hours $/5,200$

static units$).$