Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable.

A variance is favorable when the actual costs or actual quantity were lower than estimated.

Explanation:

We weren't provided with enough information to calculate each variance. I will provide with the formulas.

Variable manufacturing overhead rate (cost) variance = (standard rate - actual rate) * actual quantity

Variable overhead efficiency variance = (Standard Quantity - Actual Quantity) * Standard rate

Fixed overhead spending variance = (actual fixed overhead costs - allocated fixed overhead)

Manufacturing overhead volume variance = (Estimated manufacturing overhead rate*budgeted allocation base) - (Estimated manufacturing overhead rate * Actual amount of allocation base)

A variance is favorable when the actual costs or actual quantity were lower than estimated.