(Appendix) Variance analysis using the three-variance method for overhead costs LO₇ Furman Furniture Company uses a standard cost system in accounting for its production costs. The standard cost of a unit of furniture follows:

Required:
Compute the variances for materials, labor, and factory overhead, using the three-variance method for overhead costs.

Lumber, 100 ft. @ $150 per 1.000 ft... Direct labor, 4 hrs. @ $10 per hr. Factory overhead: Fixed (15% of direct labor)....... Variable (30% of direct labor). Total unit cost $15.00 40.00 $ 6.00 12.00 18.00 $73.00