Correr Company manufactures a line of running shoes. At the beginning of the period, the following plans for production and costs were revealed:

Units to be produced and sold .......25,000

Standard cost per unit:

Direct materials ............... $10

Direct labor ............... 8

Variable overhead ............. 4

Fixed overhead .............. 3

Total unit cost ............. $25

During the year, 30,000 units were produced and sold. The following actual costs were incurred:

Direct materials ......$320,000

Direct labor ......... 220,000

Variable overhead ..... 125,000

Fixed overhead ....... 89,000

There were no beginning or ending inventories of direct materials. The direct materials price variance was $5,000 unfavorable. In producing the 30,000 units, a total of 39,000 hours were worked, 4 percent more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours.

Required:

1. Prepare a performance report comparing expected costs with actual costs.

2. Determine the following:

a. Direct materials usage variance.

b. Direct labor rate variance.

c. Direct labor usage variance.

d. Fixed overhead spending and volume variances.

e. Variable overhead spending and efficiency variances.

3. Use T-accounts to show the flow of costs through the system. In showing the flow, you do not need to show detailed overhead variances. Show only the over- and underapplied variances for fixed and variable overhead.