Use the data in Exercise 15-47 for Marilyn, Inc.

In Exercise 15-47 Marilyn, Inc., uses a standard cost system and analyzes overhead using a two-variance analysis. The following information relates to its operations in April:

Actual total cost for direct labor ................ $86,800

Total direct labor hours worked .................. 14,000

Total standard labor hours for the output in April ........... 15,000

Direct labor rate variance—unfavorable ............. $2,800

Actual total overhead cost................... $32,000

Budgeted fixed overhead cost .................. $9,000

Practical capacity, in hours .................. 12,000

Total overhead application rate per standard direct labor hour ..... $2.25

Required

Use a model similar to the one presented in text Exhibit 15.17 to perform a three-way breakdown of the total overhead variance, as follows:

1. Overhead spending variance.

2. Variable overhead efficiency variance.

3. Production-volume variance

4. Prepare a reconciliation of results from the two-variance and three-variance approaches.