Problem - Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given:
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Standard costs per unit:
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Raw materials (1.5 grams at $16 per gram)
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$24.00
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Direct labor (0.75 hours at $8 per hour)
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$6.00
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Variable overhead (0.75 hours at $3 per hour)
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$2.25
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Actual experience for current year:
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Units produced
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22,400 units
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Purchases of raw materials (21,000 grams at $17 per gram)
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$357,000
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Raw materials used
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33,400 grams
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Direct labor (16,750 hours at $8 per hour)
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$134,000
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Variable overhead cost incurred
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$48,575
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Compute the Variable overhead spending variance and variable overhead efficiency variance assuming that the price variance for materials is recognized at point of purchase.