Li Corporation’s flexible budget formula for total overhead is $360,000 plus $8 per direct labor hour. The combined overhead rate is $20 per direct labor hour. The following data have been recorded for 2010:
Actual total overhead ........... $580,000
Total overhead spending variance ....... 16,000 F
Volume variance ................ 24,000 U
Use a three-variance approach to determine the following:
a. Standard hours for actual production
b. Actual direct labor hours worked