Riley Labs produces various chemicalcompounds for industrial use. One compound called Lundor isprepared using an elaborate distilling process. The company hasdeveloped standard costs for one unit of Lundor as follows:StandardQuantityStandard Price orRateStandardCostDirect materials2.0ounces$22.00per ounce$44.00Direct labor1.3hours$12.00per hour15.60Variable manufacturing overhead1.3hours$3.00per hour3.90$63.50During November the following activity was recorded by the company relative toproduction of Lundor:a.Materials purchased 19 000 ouncesat a cost of $358 150.b.There was no beginning inventoryof materials; however at the end of the month 15 700 ounces ofmaterial remained in ending inventory.c.The company employs 11 labtechnicians to work on the production of Lundor. During November each worked an average of 174 hours at an average rate of $10.30per hour.d.Variable manufacturing overhead isassigned to Lundor on the basis of direct labor-hours. Variablemanufacturing overhead costs during November totaled $4 976.e.During November 1 520 good unitsof Lundor were produced.Compute thevariable overhead spending and efficiency variances.Variable overhead spending variance$Variable overhead efficiency variance$Accounting
