Albert Foods processes bags of organic frozen vegetables sold at specialty grocery stores. The company allocates manufacturing overhead based on direct labor hours. Albert has budgeted fixed manufacturing overhead for the year to be $628,000. The predetermined fixed manufacturing overhead rate is $16.20 per direct labor hour, while the standard variable manufacturing overhead rate is $0.60 per direct labor hour. The direct labor standard for each case is one-quarter (0.25) of an hour.
The company actually processed 164,000 cases of frozen organic vegetables during each year and incurred $667,120 of manufacturing overhead. Of this amount, $634,000 was fixed. The company also incurred a total of 41,400 direct labor hours.
Requirements:
1. How much variable overhead would have been allocated to production? How much fixed overhead would have been allocated to production?
2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances tell managers?
3. Compute the fixed MOH budget variance and the fixed overhead volume variance. What do these variances tell managers?

Data Set
GrandScapes is a manufacturer of large ower pots for urban settings.
The company has these standards:
Direct materials (resin)............................................. 8 pounds per pot at a cost of $6.00 per pound
Direct labor............................................................. 2.0 hours at a cost of $15.00 per hour
Standard variable manufacturing overhead
rate.....................................................$4.00 per direct labor hour
Budgeted fixed manufacturing overhead............... $16,600
Standard fixed MOH rate........................................ $8.00 per direct labor hour (DLH)

GrandScapes allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,100 ower pots:

Direct materials....................................................... Purchased 9,950 pounds at a cost of $6.30 per pound; used 9,350 pounds to produce 1,100 pots
Direct labor............................................................. Worked 2.2 hours per ower pot (2,420 total DLH) at a cost of $14.00 per hour
Actual variable manufacturing overhead................ $4.30 per direct labor hour for total actual variable manufacturing overhead of $10,406
Actual fixed manufacturing overhead..................... $16,400
Standard fixed manufacturing overhead allocated based
on actual production....................$17,600