Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed: Pairs of shoes to be produced and sold...

Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the
year, the following plans for production and costs were revealed:
Pairs of shoes to be produced and sold 55,000
Standard cost per unit:
Direct materials $15
Direct labor 12
VOH 6
FOH 3
Total unit cost $36
During the year, a total of 50,000 units were produced and sold. The following actual costs were
incurred:
Direct materials $775,000 VOH $310,000
Direct labor 590,000 FOH 180,000
There were no beginning or ending inventories of raw materials. In producing the 50,000 units,
63,000 hours were worked, 5% more hours than the standard allowed for the actual output.
Overhead costs are applied to production using direct labor hours.
Required:
1. Using a flexible budget, prepare a performance report comparing expected costs for the
actual production with actual costs.
2. Determine the following: (a) Fixed overhead spending and volume variances and
(b) Variable overhead spending and efficiency variances.