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

Direct materials (15 Ibs. @ $ 4 per Ib.) . . . . . . . . . . . $ 60.00

Direct labor (3 hrs. @ $ 15 per hr.) . . . . . . . . . . . . 45.00

Overhead (3 hrs. @ $ 3.85 per hr.) . . . . . . . . . . . . . 11.55

Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . $ 116.55

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

Required
1. Compute the direct materials 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,
(c) Total overhead controllable.
4. Prepare a detailed overhead variance report (as in Exhibit 23.15) that shows the variances for individual items ofoverhead.

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Operating Levels 70% 80% 90% Production in units Standard direct labor hours v......21,000 24,000 27,000 Budgeted overhead 7,000 8,000 9,000 Variable overhead costs Indirect materials. . 21,000 5.250 2.625 Total variable costs..42000 $13.125$15,000 $16,875 24.000 27,000 6,000 6.750 3.000 3,375 48,000 54,000 Indirect labor Power Fixed overhead costs Rent of factory building. 15,000 15,000 5.000 0,000 19.400 44,400 44.400 44,400 10,000 10,000 19.400 9,400 Total fixed costs. e. 517.500 468.100 Direct materials (138,000 lbs. $3.75 per lb.).... Direct labor (31,000 hrs. Overhead costs $15.10 per hr) Indirect materials $15,000 . ..26,500 6,750 4.000 Power .. Depreciation-machinery..10,000 Supervisory salaries.. Total costs 22,000 99.250 $084.850