Machine Metal Works Ltd. is planning to produce 300,000 metal widgets for the coming year. Each unit requires 3 standard hours of direct labour for completion at a standard direct labour rate of $12.00 per hour, and a standard of 0.75 grams of direct material at a standard cost of $20 per gram. The company uses direct labour hours to assign overhead to products. The total overhead budgeted for the coming year is $1,350,000, and the standard fixed overhead rate is $1.50 per unit produced. Actual results for the year were:

Required:
1. Compute the variable overhead spending and efficiency variances. Label as favourable or unfavourable.
2. Compute the fixed overhead spending and volume variances. Label as favourable or unfavourable.

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Production (units) Actual direct labour hours Beginning direct materials inventory (units) Ending direct materials inventory (units) Direct materials purchases (units) Cost of direct materials purchases Direct labour cost Actual variable overhead Actual fixed overhead 295,000 920,000 45,000 23,500 200,000 S4,100,000 $11,316,000 $900,000 $460,000