(Solved by Humans)-Zeta, Inc., produces handwoven rugs. Budgeted production is 5,000 rugs per month and the standard di

Question

Zeta, Inc., produces handwoven rugs. Budgeted production is 5,000 rugs per month and the standard direct labor required to make each rug is 2 hours. All overhead is allocated based on direct labor hours. Zeta's manager is interested in what caused the recent month's $3,000 unfavorable overhead variance. The following information was available to aid in the analysis: Budgeted Amounts Actual Results   Production in units 5,000 4,500   Total labor hours 10,000 9,000   Total variable overhead $ 60,000 $ 55,000   Total fixed overhead 40,000 38,000       Total overhead $ 100,000 $ 93,000 a. What was the overhead spending variance for the month? b. What was the overhead volume variance?