Question: Bike Pedals manufactures bicycle seats. The firm budgeted to manufacture 25,000 seats in April with 0.05 standard machine hours per seat. The total variable factory overhead was budgeted at $30,000 for the operation.
The firm manufactured 30,000 seats using 1,600 machine-hours and incurred $34,000 total variable factory overhead.
Required: Determine the following variances (be sure to indicate whether the variance is favorable or unfavorable).
(A) Variable overhead spending variance
(B) Variable overhead efficiency variance
(C) Variable overhead flexible budget variance