Milberg Co. uses absorption costing and standard costing to improve cost control. In 2016, the total budgeted overhead rate was $1.55 per direct labour hour. When preparing the budget, Milberg expected a monthly activity level of 10,000 direct labour hours. The monthly variable overhead cost budgeted for this level of activity was $9,500.The following data on actual results are provided for the month of November 2016.calculate the following variances:Material Price VarianceMaterials Quantity VarianceTotal Materials VarianceLabor Price VarianceLabor Quantity VarianceTotal Labor VarianceVariable Overhead Spending VarianceVariable Overhead Efficiency VarianceVariable Overhead Total VarianceFixed Overhead Spending VarianceFixed Overhead Efficiency VarianceFixed Overhead Total Variance* please include all formulas and do not use excel*I am struggling with the fixed and variable overhead variances Materials purchased20,000 unitsDirect labour costs incurred$36,000Total of direct labour rate and efficiency variancesS 500 FActual wage rate ($0.20 less than standard)$ 4.80Underapplied variable overhead costs$ 1,065 UTotal underapplied fixed and variable overhead costs$ 2,256 UMaterials price variance$ 200 FMaterials efficiency variance$ 610 FPrice of purchased materials$ 0.60 per unitMaterials used15,000 units
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