Gleason Company Has Developed the Following Standard Cost Data Based

Essay

Gleason Company has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity. Fixed overhead is $360,000 and variable overhead is $180,000 at this level of activity.

During the current period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were:
$$\begin{array} { l | l | l } \text { Direct material } ( 380,000 \mathrm { lbs } . ) \ldots \ldots \ldots \ldots \ldots & \$ 779,000 \\\hline \text { Direct labor } ( 63,000 \mathrm { hrs } . ) \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 507,150 \\\hline \text { Fixed overhead } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 365,000 \\\hline \text { Variable overhe ad } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 220,000\end{array}$$ Calculate the variable overhead spending and efficiency variance and the fixed overhead spending
and volume variances. Indicate whether each is favorable or unfavorable.