Review the data from Great Fender given in Exercise E23- 19. Consider the ­following additional information:

Static budget variable overhead........... $ 5,500

Static budget fixed overhead ...........$ 22,000

Static budget direct labor hours ...........550 hours

Static budget number of units ...........22,000 units

Great Fender allocates manufacturing overhead to production based on standard ­direct labor hours. Great Fender reported the following actual results for 2014: ­actual variable overhead, $ 4,950; actual fixed overhead, $ 23,000.

Requirements

1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable.