Variable Overhead Variances, Service Company

Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations:

Deliveries made:	37,800
Direct labor:	36,000 delivery hours @ $9.00
Actual variable overhead:	$155,600

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.00 per hour was used. The labor standard requires 0.80 hour per delivery.

Required:

1. Compute the standard hours allowed for actual deliveries made last year. Round your answer to the nearest dollar.

$

2. Compute the variable overhead spending and efficiency variances.

Note: Enter variance amounts as positive values. Then select Favorable or Unfavorable from the dropdown list to designate the type of variance.

Spending variance: $

Efficiency variance: $