Before information shows is the correct and complete question.
The Lopez Company use a standard costing in its manufacturing plant for the auto part. The standard cost of particular auto part based on a denominator level of a 4.000 output unit per year. included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour.
Actual output produced was 4.400 units.
Variable manufacturing overhead incurred was $245.000.
Fixed manufacturing overhead incurred was $373.000.
Actual machine-hours were 28.400.
Prepare the analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.
Additional diagram attached to this question is displayed in the first image below.
Explanation:
By using a columnar method, the analysis of all the variance & fixed manufacturing overhead varaince can be computed as follows:
Variable manufacturing overhead analysis:
Actual cost Incurred: ║ Actual input ×  Budgeted ║ Allocated: Budgeted
Actual input × Actual   rate                     Input for actual output
rate                                        × Budgeted rate
245000             28400×$8.00 = 227200    (4400×6hrs×$8)
                                           = 211,200
        17800 U           16800  U
      Spending Variance    Efficiency Variance
                   33800 U
                Flexible Budget Variance
Hence;
The spending Variance = $17,800 U
Efficiency Variance  = $16,000 U
Flexible Budget Varaince = $33800 U
where;  F = Favourable  & U = Unfavourable
For the fixed Manufacturing Overhead:
Actual cost Incurred: â•‘ Flexible Budget Lump â•‘ Allocated: Budgeted
Actual input × Actual   sum regardless of the   Input for actual output
rate                 output level           × Budgeted rate
                                      Â
373000             4000×6hrs×15 = 360000  (4400×6hrs×$15)
                                           = 396000
13000 U Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 36000 Â F
Spending Variance/ Â Â Â Â Â Â Â Production-Volume
Flexible budgeted variance  Variance
                         23000 F
                    Over allocated fixed
                    Overhead
Hence;
The spending Variance = $13000 U
The production Volume Variance  = $36,000 F
Over allocated fixed overhead = $23000 F
where;  F = Favourable  & U = Unfavourable
NOTE: To have a better view of the above computation in a table format, refer to the second and the third diagram in the image below.