Question - Henton, Inc. budgeted $294,000 for overhead. Based on a normal activity level of 7,000 units and a standard of 3 machine hours per unit, the standard fixed overhead allocation rate is $12 per machine hour. During the current period, 6,100 units were produced and 5,600 units were sold. Actual machine hours were 18,000, and actual overhead was $280,000. Assume variable overhead is allocated based on machine hours.
a) Calculate the combined variable and fixed overhead variance, is it favorable or unfavorable?
b) Calculate the variable overhead efficiency variance, is it favorable or unfavorable?
c) Calculate the fixed overhead production volume variance, is it favorable or unfavorable?