Regal Clothing is a manufacturer of designer suits. For June 2014, each suit is budgeted to take 4 labor-hours. The budgeted number of suits to be manufactured in June 2014 is 1,060. Regal Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturinglabor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2014 arebudgeted, $59,360, andactual, $63,915. In June 2014 there were 1,120 suits started and completed. There were no beginning or ending inventories of suits.

Requirements

1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.

2. Compute theproduction-volume variance for June 2014. What inferences can Regal Clothing draw from thisvariance?