Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed:
Pairs of shoes to be produced and sold   55,000
Standard cost per unit:
Direct materials   $15
Direct labor   12
VOH   6
FOH   3
Total unit cost   $36

During the year, a total of 50,000 units were produced and sold. The following actual costs were incurred:
Direct materials $775,000   VOH $310,000
Direct labor   590,000   FOH 180,000

There were no beginning or ending inventories of raw materials. In producing the 50,000 units, 63,000 hours were worked, 5 percent more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours.

Required:
1. Using a ?exible budget, prepare a performance report comparing expected costs for the actual production with actual costs.
2. Determine the following: (a) Fixed overhead spending and volume variances and (b) Variable overhead spending and effciency variances.