Computing standard overhead cost, a total overhead variance, a budget variance, and spending and efficiency variances. The Gregory Corporation’s standard overhead rate is $24 per direct labor hour. The overhead rate is based on budgeted fixed costs of $400,000 and budgeted variable costs of

$200,000. Each unit requires 15 minutes of direct labor.

During the year, 127,000 units were produced, requiring 32,000 direct labor hours, at an actual total overhead cost of $672,000.

Instructions 1. Compute the standard overhead cost per unit of product.
2. Compute the standard overhead cost charged to Work in Process during the year.
3. Compute the total overhead variance for the year and show whether it is favorable or unfavorable.
4. Compute the budget variance and the volume variance and show whether each is favorable or unfavorable.
5. Divide the budget variance into the spending variance and the efficiency variance and show whether each is favorable or unfavorable.