Ice Box Gourmet, Inc., produces containers of frozen food. During April, The Company produced 725 cases of food and incurred the following actual costs.

Variable overhead....................................................................... $ 5,500

Fixed overhead............................................................................13,000

Actual labor cost (4,000 direct-labor hours)................................75,600

Actual material cost (15,000 pounds purchased and used).........33,000

Overhead is budgeted and applied using direct-labor hours. Standard cost and annual budget information are as follows:

Standard Costs per Case

Direct labor (5 hours at $18)............................................$ 90.00

Direct material (20 pounds at $2).................................... 40.00

Variable overhead (5 hours at $1.50).............................. 7.50

Fixed overhead (5 hours at $3)........................................ 15.00

Total.................................................................................$152.50

Annual Budget Information

Variable overhead............................................................$ 75,000

Fixed overhead.................................................................$150,000

Planned activity for year..................................................50,000 direct-labor hours

Required:

1. Prepare as complete an analysis of cost variances as is possible from the available data.

2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the standard rates were $17.50 per hour for direct labor, and $1.60 per direct-labor hour for variable overhead.