McDormand, Inc., reported a $3,500 unfavorable spending(price)variance for variable overhead and a $35,000 unfavorable spending (price) variance for fixed overhead. The flexible budget had $1,084,500 variable overhead based on 36,150 direct labor-hours; only 34,110 hours were worked. Total actual overhead was $1,829,800. The number of estimated hours for computing the fixed overhead application rate totaled 38,400 hours.  
  

Required:

a. Compute the following variable overhead spending and efficiency variances The "cost " variance is the sum of the spending and efficiency variance. The spending variance is also known as the price variance(Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

b. Compute the following fixed overhead spending and production volume variances. The "cost" variance is the sum of the spending and production volume variance. The spending variance is also known as the price variance (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

 
 

Transcribed Image Text:

Price variance Efficiency variance Variable overhead cost variance Price variance Efficiency variance Variable overhead cost variance