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| | WWW Companys flexible budget for manufacturing overhead follows: | Account | Machine Hours | Machine Hours | Machine Hours | | | 8,000 | 9,000 | 10,000 | | Variable Overhead | $10,000 | $11,250 | $12,500 | | Fixed Overhead | $28,000 | $28,000 | $28,000 | | Total Overhead Costs | $38,000 | $39,250 | $40,500 | |
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The following additional information is available for the most recent period:
- The activity level of 8,000 machine hours was chosen to compute the predetermined overhead rate
- At 8,000 machine hours level of activity the company should produce 3,200 units of output
- The companys actual operating results were as follows:
Number of units produced 3,500
Actual machine hours 8,500
Actual fixed overhead $12,500
Actual total overhead $42,500
Required:
- Compute the variable spending and efficiency variances and fixed overhead spending and volume variances.
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