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|
What was the overhead spending variance for the month?
What was the overhead volume variance?