Variances and conversion cost category Svenson Technology considers direct labor cost too insignificant to separately account for and, therefore, uses a $22.50 per machine hour predetermined conversion cost rate (of which $16 is related to fixed overhead costs). The conversion rate was established based on expected capacity of 201,720 machine hours. One of Svenson Technology's products requires 4.1 machine hours to manufacture. In September, the company manufactured 4,200 units of product and used 16,600 machine hours and 168 direct labor hours. Variable and fixed conversion costs incurred for September were $110,246 and $266,000, respectively. a. What is the expected capacity per month in units and machine hours? Expected capacity in units 4,100 Expected capacity in MHS 16,810 b. Prepare a four-variance analysis of conversion costs for September. Note: Do not use negative signs with your answers. Fixed Conv. Spending Variance Actual Fixed Conv. Budgeted Fixed Conv. = Spending Variance $ 266,000 265,600 X = $ 400 X U Fixed Conv. Volume Variance Budgeted Fixed Conv. Applied Fixed Conv. = Volume Variance $ 265,600 x $ 275,520 9,920 X F Variable Conv. Spending Variance Actual Var. Conv. - Budgeted Var. Conv. = Spending Variance $ 110,246 107,900 2,346U Variable Conv. Efficiency Variance Budgeted Var. Conv. - Applied Var. Conv. = Efficiency Variance $ 107,900 111,930 4,030F c. Prepare a three-variance analysis of conversion costs for September. Note: Do not use negative signs with your answers. OH Spending Variance Actual Conv. Budgeted Conv. At Actual Spending Variance $ 376,246 373,500 x = $ 2,746 x U $ Budgeted Conv. at Actual $ 373,500 x OH Efficiency Variance Budgeted Conv. at Std. Efficiency Variance $ 387,450 x = $ 13,950 * F Budgeted Conv. at Std. $ 387,450 X Volume Variance Applied Conv. = Volume Variance $ 373,500 x = $ 0 x U