Transcribed image text : Sunset Hills Company makes customized golf shirts for sale to golf courses. Each shirt requires 3 hours to produce because of the customized log or each golf course. Sunset Hills uses direct labor-hours to allocate the overhead cost to production. Fixed overhead costs, including rent, depreciation, supervisory salaries, and other production expenses, are budgeted at $15 , 000 per month. The facility currently used is large enough to produce 1,000 shirts per month. During March, Sunset Hills produced 680 shirts and actual fixed costs were $12 , 800 . Read the requirements. Requirements 1 \& 2. Calculate the fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U). If Sunset Hills uses direct labor-hours available at capacity to calculate the budgeted fixed overhead rate, what is the production-volume variance? Indicate whether it is favorable (F) or unfavorable (U). Begin by determining the formula then computing the fixed overhead rate per direct labor hour. (Round the fixed overhead rate to the nearest cent.) Requirements 1. Calculate the fixed overhead spending variance and indicate whether it is favorable ( F ) or unfavorable ( U ) . 2. If Sunset Hills uses direct labor-hours available at capacity to calculate the budgeted fixed overhead rate, what is the production-volume variance? Indicate whether it is favorable ( F ) or unfavorable ( U ) . 3. An unfavorable production-volume variance could be interpreted as the economic cost of unused capacity. Why would Sunset Hills be willing to incur this cost? 4. Divot Down's budgeted variable cost per unit is $24 , and it expects to sell its shirts for $55 apiece. Compute the sales-volume variance and reconcile it with the production-volume variance calculated in requirement 2 . What does each concept measure