Tech-Elec Manufacturing Company estimates the following labor and overhead costs for the period:

Variable overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,200

Fixed overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,050

Total estimated overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $94,250

Estimated direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $65,000

Standard direct labor rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10

Each unit will require 26 hours of labor.

Estimated production for the period . . . . . . . . . . . . . . . . . . . . . . . 500 units

Production statistics for the period:

Actual production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 units

Actual direct labor hours used . . . . . . . . . . . . . . . . . . . . . . . . . 13,015 hours

Actual direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $133,400

Actual overhead costs:

Variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45,009

Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,125

Required:

Use the four-variance method for overhead analysis. Calculate the variances for direct labor and overhead. Prove that the overhead variances equal over- or underapplied factory overhead for the period.