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.

Two-variance overhead analysis

The standard specifications for an electric motor manufactured by AAA Electric Co. follow:

Standard cost per unit:

Factory overhead rates are based on a normal 70% capacity and use the following flexible budget:

The actual production was 2,500 motors, and factory overhead costs totaled $29,750.

Required:

Calculate the factory overhead variances using the two-variance method.