Exercise 3. (10 Points).

Selected information from Richards Company's flexible budget is presented below:

	Operating Levels
	80%	90%	100%
Budgeted production in units	4,800	5,400	6,000
Budgeted labor (standard hours)	9,600	10,800	12,000
Budgeted overhead:
Variable overhead	$86,400	$97,200	$108,000
Fixed overhead	63,600	63,600	63,600

Richards Company applies overhead to production at a rate of $31.25 per unit based on a normal operating level of 80% of capacity. For the current period, Richards Company produced 5,400 units and incurred $62,000 of fixed overhead costs and $96,000 of variable overhead costs. The company used 11,000 labor hours to produce the 5,400 units. Calculate the variable overhead spending and efficiency variances, and the fixed overhead spending and volume variances. Indicate whether each variance is favorable or unfavorable.