Premium, Inc. uses a standard cost system and provides the following information.
Static budget direct labor hours 1,100 hours Static budget number of units 550 units Standard direct labor hours 2 hours per unit
Premium allocates manufacturing overhead to production based on standard direct labor hours. reported the following actual results for overhead, actual number of units produced, actual direct labor hours, actual variable actual fixed overhead, Requirement 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
