Turow Trailers assembles horse trailers. Two models are manufactured: G7 and V8. While laborintensive, the production process is not very complicated. The single plant produces all the trailers with 48 work teams of two or three workers. Sixteen supervisors oversee the work teams. Materials handlers deliver all the parts needed for each trailer to the work team. Human resources, accounting, inspection, purchasing, and tools are the other major overhead departments. Some operating statistics for 2016 and 2017 follow.

Required:
a. Calculate all the overhead variances for both 2016 and 2017.
b. Discuss who in the plant should be held responsible for each overhead variance?

2016 2017 Budgeted denominator volume (direct labor hours) Flexible budget: Fixed overhead 1 million 1 million $2.1 million $2.2 million $7 Variable overhead per direct labor hour Units produced: G7 $8 11,000 8,000 V8 Standard direct labor hours per unit of: 12,000 6,000 G7 40 40 V8 50 50 Actual overhead incurred $9.0 million $8.1 million 1 million Actual direct labor hours 0.7 million