Minneapolis Manufacturing Inc. manufactures a small electric motor that is a replacement part for the more popular gas furnaces. The standard cost card shows the product requirements as follows:

Direct materials­2 lb @ $4 per lb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.00

Direct labor­5 hr @ $8 per hr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00

Factory overhead: Variable cost­5 hr @ $2 per hr . . . . . . . . . . . . . . . . . . . . 10.00

Fixed cost­5 hr @ $4 per hr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20.00

Total standard cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... $78.00

Factory overhead rates are based on normal 100% capacity and the following flexible budgets:

The company produced 3,500 units, using 18,375 direct labor hours and incurring the following overhead costs:
Factory overhead-fixed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $61,950
Factory overhead-variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,710

Required:
1. Calculate the factory overhead: variable-spending, variable efficiency, fixed-spending, and production-volume variances.
2. Does the net variance represent under- or overapplied factoryoverhead?

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Normal 90% 100% 110% 2,500 3,000 3,500