Jesse is the office manager of a large firm called Law & Legal Services, Inc. At Law & Legal Services, overhead is allocated to client accounts using hours billed. Jesse found the following information related to overhead for the previous month:
• Spending variance = $14,000 unfavorable
• Volume variance = $6,000 favorable
• Actual overhead = $56,000
• Actual hours billed = 4,000 hours
Are the normal or expected hours for billing each month higher or lower than the actual hours billed last month? Were the actual expenditures of office supplies, equipment, indirect labor, and so on, higher or lower than expected?