At the Beginning of the Year, Goodman Company Had the Following

Essay

At the beginning of the year, Goodman Company had the following standard cost sheet for one of its food products: $\begin{array}{lr}\text { Direct materials ( } 10 \mathrm{~kg} @ 3.20 \text { per kilogram) } & \$ 32.00 \\\text { Direct labour (4 hours }(\$ 9.00 \text { per hour) } & 36.00 \\\text { Fixed overhead (4 hours }(\$ 4.00 \text { per hour) } & 16.00 \\\text { Variable overhead (4 hours }(\omega, \$ 0.75 \text { per hour) } & 3.00\\\text { Standard cost per unit }&\$87.00\end{array}$ The company computes its overhead rates using practical volume, which is 72,000 units. The actual results for the year are: $$\begin{array} { l r } \text { Units produced } & 70,000 \\\text { Direct labour hours } & 290,000 \\\text { Actual wage per hour } & \$ 9.05 \\\text { Fixed overhead } & \$ 1,160,000 \\\text { Variable overhead } & \$ 218,000\end{array}$$ Required:
A. Compute the fixed overhead spending and volume variances.
B. Compute the variable overhead spending and efficiency variances.