Reference no: EM132974142

Question - Best?, Inc. uses a standard cost system and provides the following information.

Static budget variable overhead $2,300

Static budget fixed overhead $3,450

Static budget direct labor hours 1,150 hours

Static budget number of units 575 units

Standard direct labor hours 2 hours per unit

Best allocates manufacturing overhead to production based on standard direct labor hours. Best reported the following actual results for 2024?: actual number of units? produced, 1,000?; actual variable? overhead, $5,000?; actual fixed? overhead, $3,500?; actual direct labor? hours, 1,900.

Required -

1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

2. Explain why the variances are favorable or unfavorable.