In all problems involving variances, use “F” and “U” to indicate favorable and unfavorab...

In all problems involving variances, use “F” and “U” to indicate favorable and unfavorable variances, respectively.

(Appendix) Variance analysis using the three-variance method for overhead costs

Franklin Furniture Co. uses a standard cost system in accounting for its production costs. The standard cost of a unit of furniture follows:

The following flexible monthly overhead budget applies:

Required:

Compute the variances for materials, labor, and factory overhead, using the three-variance method for overhead costs.