Simon Enterprises applies variable overhead at a rate of $1.50 per direct labor hour and fixed overhead at a rate of $1.75 per direct labor hour. The company budgets 2 direct labor hours for each of the 5,900 units that are scheduled for production. Last year, Simon incurred actual variable overhead totaling $18,750 and actual fixed overhead totaling $21,500 for the production of 6,000 units. In addition, 11,800 direct labor hours were actually incurred.
A. Calculate the variable overhead efficiency variance.
B. Calculate the variable overhead spending variance.