Standard direct labor hours budgeted by Witherspoon Company for April production were 1,200, with factory overhead at that level budgeted at $16,800, of which $4,800 is variable and $12,000 is fixed. Actual labor hours for the month were 1,120; however, the number of standard labor hours allowed for actual April production is 1,170. Actual factory overhead incurred during the month was $15,800.
Required:
Compute the overall factory overhead variance and analyze it for spending, variable efficiency, fixed efficiency, and idle capacity variances, using the four-variance method presented in the appendix to this chapter. Indicate whether the variances are favor-able or unfavorable.