Variance Analysis. Hardwood Furniture, Incorporated manufactures all types of office furniture. The company has one giant plant and office complex in California, and employs a full-time cost accounting department to control and analyze production costs. At the end of the year, the cost accounting department showed the following data: The factory overhead rate is based on a normal capacity of 8,000 hours. Total budgeted factory overhead expenses were

$11,560, consisting of variable expenses, $4,960, and fixed expenses, $6,600.

The standard cost card showed:

Compute the variances for

(a) direct materials,

(b) direct labor, and

(c) factory overhead, showing (1) computation of overhead rates and (2) variances using the three-factor analysis.

Direct materials Direct labor $5.00 per unit 4.00 per hour