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The Lambda Company uses a job costing system to accumulate its production costs. An annual predetermined overhead rate based on direct labor-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes is presented below.

Direct Labor Hours	100,000	120,000	140,000
Variable Overhead Costs	$325,000	$390,000	$455,000
Fixed Overhead Costs	216,000	216,000	216,000
Total Overhead	$541,000	$606,000	$671,000

The expected volume is 120,000 direct labor-hours for the entire year which will be used to apply overhead. The following data is for November. Jobs 50 and 51 were completed during November.

Inventories, November 1:

Direct Materials and supplies	$10,500
Work in Process (job 50)	54,000
Finished Goods (job 49)	112,000

Purchases:

Direct materials	$135,000
Factory supplies	15,000

Requisitioned for production

Direct Materials, Job 50	$45,000
Direct Materials, Job 51	37,500
Direct Materials, Job 52	25,500
Supplies (overhead)	12,000

Factory direct labor-hours:

Job 50	3,500 hours
Job 51	3,000 hours
Job 52	2,000 hours

Other information:

1) Actual manufacturing labor costs:

Direct labor wages (8,500 hours)	$6.00 per hour
Indirect labor wages	$15,000
Supervisory salaries	$6,000

2) Actual building occupancy costs:

Manufacturing facilities	$6,500
Sales and administrative	$2,500

3) Actual manufacturing equipment costs:

Power	$4,000
Repair and maintenance	$1,500
Other	$2,500

Requirements:

Create a report that compares the actual overhead with the applied overhead. Indicate whether the overhead is over or under applied. Calculate the Fixed Overhead Volume Variance for November.

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