ANSWER QUESTION 6 AND 7!!

Case #3

Login Corp. employs a standard costing system. The company has capacity to produce 35,000 units per year and applies overhead is applied on the basis of direct labour hours. The standard costing system allows two direct labour hours per unit produced. For 2022, the company budgeted variable overhead to be $266,000 and fixed overhead to be $315,000. Actual results for the year are as follows:

Units produced	32,000
Direct labour	62,500 hours
Variable overhead	$243,750
Fixed overhead	$324,000

1. Compute the predetermined variable overhead rate (SVOR).

2. Compute the variable overhead spending variance and the variable overhead efficiency

   variance and indicate whether each variance is favourable or unfavourable.

3. Compute the predetermined fixed overhead rate (SFOR).

4. Compute the applied fixed overhead.

5. Compute the fixed overhead spending variance and the fixed overhead volume

   variance.

6. Discuss what each variance measures.

7. What could cause the variance to arise?