Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Sedona Company set the following standard costs for one unit of its product for 2017. Direct material (30 lbs. @ $2.50 per lb.) Direct labor (20 hrs. @ $4.80 per hr.) Factory variable overhead (20 hrs. @ $2.30 per hr.) Factory fixed overhead (20 hrs. @ $1.20 per hr.) Standard cost $ 75.00 96.00 46.00 24.00 $241.00 The $3.50 ($2.30 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 53,000 units per month. The following monthly flexible budget information is also available. 75% Operating Levels (% of capacity) 65% 70% 34,450 37,100 39,750 689,000 742,000 795,000 Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead Total overhead $ 1,584,700 890,400 $ 2,475,100 $1,706,600 890,400 $2,597,000 $1,828,500 890,400 $2,718,900 During the current month, the company operated at 65% of capacity, employees worked 652,000 hours, and the following actual overhead costs were incurred. Variable overhead costs Fixed overhead costs Total overhead costs $1,525,000 954,000 $2,479,000 AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate SFR = Standard Fixed Rate Exercise 21-18A Computation and interpretation of overhead spending, efficiency, and volume variances LO P4 1. Compute the variable overhead spending and efficiency variances. Actual Variable OH Cost Flexible Budget Standard Cost (VOH applied) 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. Actual Fixed OH cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) 3. Compute the controllable variance. Controllable Variance Controllable variance