At the beginning of the year, Gaillard Company had the following standard cost sheet for one of its chemical products:
Direct materials (5 lbs. @ $ 3.20) ....... $ 16.00
Direct labor (2 hrs. @ $ 18.00) ........ 36.00
FOH (2 hrs. @ $ 4.30) ............ 8.60
VOH (2 hrs. @ $ 0.90) ........... 1.80
Standard cost per unit ............ $ 62.40
Gaillard computes its overhead rates using practical volume, which is 144,000 units. The actual results for the year are as follows:
(a) Units produced: 143,400;
(b) Direct labor: 286,400 hours at $ 18.10;
(c) FOH: $ 1,235,900;
(d) VOH: $ 259,300.
Required:
1. Compute the variable overhead spending and efficiency variances.
2. Compute the fixed overhead spending and volume variances.