The following information relates to Morgan, Inc.'s overhead costs for the month: (Click the icon to view the information.) Requirements 1. Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Requirement 1. Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin by selecting the formulas needed to compute the variable overhead (VOH) and fixed overhead (FOH) variances, and then compute each variance amount. (Actual cost - Standard cost) Actual hours (Actual hours - Standard hours allowed) x Standard cost Actual overhead - Budgeted overhead Budgeted overhead - Allocated overhead = VOH cost variance = VOH efficiency variance = FOH cost variance = FOH volume variance Data table Static budget variable overhead Static budget fixed overhead $ 7,800 $ 3,900 Static budget direct labor hours 1,300 hours Static budget number of units 5,200 units - Morgan allocates manufacturing overhead to production based on standard direct labor hours. Last month, Morgan reported the following actual results: actual variable overhead, $10,800; actual fixed overhead, $2,770; actual production of 7,000 units at 0.20 direct labor hours per unit. The standard direct labor time is 0.25 direct labor hours per unit (1,300 static direct labor hours / 5,200 static units).