Easy Meals Now (EMN) operates a meal home- delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who phone or fax orders to EMN. EMN allocates variable and fixed overhead costs on the basis of delivery time. EMN’s owner, Steve Roberts, obtains the following information for May 2014 overhead costs:

Required
1. Compute spending and efficiency variances for EMN’s variable overhead in May 2014.
2. Compute the spending variance and production-volume variance for EMN’s fixed overhead in May 2014.
3. Comment on EMN’s overhead variances and suggest how Steve Roberts might manage EMN’s variable overhead differently from its fixed overheadcosts.

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Actua Static Easy Meals Now (May 2014) Results Budget 8 60012000 0.70 Output units (number of deliveries) Hours per delivery Hours of delivery time Variable overhead cost per hour of delivery time Variable overhead costs Fixed overhead costs 5,660 $1.75 $11,320 $39 600 $33,600