Harris Company has set the following standard costs per unit for the product it manufactures.

Direct materials (5 lbs.@ $3.00 per lb.) . . . . . . . . $15

Direct labor (2 hr. @ $20 per hr.) . . . . . . . . . . . 40

Overhead (2 hr. @ $10 per hr.) . . . . . . . . . . . . 20

Total standard cost . . . . . . . . . . . . . . . . . . . . . $75

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available.

During March, the company operated at 90% of capacity and produced 9,000 units, incurring the following actual costs.

Required
1. Compute the direct materials cost variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute these variances:
(a) Variable overhead spending and efficiency,
(b) Fixed overhead spending and volume, and
(c) Total overhead controllable.
4. Prepare a detailed overhead variance report (as in Exhibit 8.19) that shows the variances for individual items ofoverhead.

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Operating Levels 70% 7,000 Production in unitsPe Standard direct labor hours .........14.000 Budgeted overhead 8.000 9,000 18,000 16.000 Varlable overhead costs Power... Malntenance. Total varlable costs .. 7.000 3,500 56,000 8,000 4.000 64,000 9.000 4,500 72,000 Fixed overhead costs Rent of factory building -..····.. 24,000 24,000 24,000 Depreclation-machinery4 Taxes and insurance Supervisory salaries . 27.200 27.200 27.200 Total fixed costs.... 40,000 4.00 4,800 40.000 4,800 96,000 96,000 96,000 Direct materlals (46,000 bs. $2.95 per lb.) Direct labor (18.800 hrs. @ $20.10 per hr.) ····… Overhead costs $ 135.700 377.880 Power. Malntenance .--... 9.600 ..4,750 39,400 5.200 . of factory bulilding Depreclation-machinery Taxes and Insurance _.. . . Supervisory salarles.A828,000 164,950 Total costs $678,530