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Evaluate of Variable-overhead spending variance and the variable-overhead efficiency variance
Gantt Textiles Inc. incurred actual variable overhead expenses of $50,000 in the current year for the production of 6,000 units. Variable overhead was applied at a rate of $3.25 per direct labor hour, and 2 direct labor hours were budgeted for each unit. The company used 16,000 direct labor hours for production. Compute the variable-overhead spending variance and the variable-overhead efficiency variance. Indicate whether each variance is favorable (F) or unfavorable (U).
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