Riley Labs produces various chemicalcompounds for industrial use. One compound, called Lundor, is prepared using an elaborate distilling process. The company hasdeveloped standard costs for one unit of Lundor as follows:
StandardQuantity Standard Price or Standard
Direct materials 2.0ounces $ 22.00 per ounce $ 44.00
Direct labor 1.3 hours $12.00 per hour 15.60
Variable manufacturing overhead 1.3 hours $3.00 per hour 3.90
During November,the following activity was recorded by the company relative to production of Lundor:
a. Materials purchased, 19,000 ouncesat a cost of $358,150.
b. There was no beginning inventory of materials; however, at the end of the month, 15,700 ounces of material remained in ending inventory.
c. The company employs 11 lab technicians to work on the production of Lundor. During November, each worked an average of 174 hours at an average rate of $10.30per hour.
d. Variable manufacturing overhead is assigned to Lundor on the basis of direct labor-hours. Variable manufacturing overhead costs during November totalled $4,976.
e. During November, 1,520 good unitsof Lundor were produced.
Compute the variable overhead spending and efficiency variances.