Klein Surgical Instruments Inc. makes a special line of forceps, SFA, in batches. Klein randomly selects forceps

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Klein Surgical Instruments Inc. makes a special line of forceps, SFA, in batches. Klein randomly selects forceps from each SFA batch for quality-testing purposes. Quality-testing costs are batch-level costs. A separate quality-testing section is responsible for SFA quality testing. Quality-testing costs consist of some variable and some fixed costs in relation to the quality-testing hours. The following information is for 2015:
Static-Budget Amounts Actual Amounts
Units of SFA produced and sold..............21,000.......................22,000
Batch size (number of units per batch)............500...........................550
Testing hours per batch..............................5.5...........................5.4
Variable overhead cost per testing hour......$ 48.00.....................$ 50.40
Total fixed testing overhead costs............$32,650....................$32,659
Required
1. For variable testing overhead costs, calculate the efficiency and rate variances. Comment on the results.
2. For fixed testing overhead costs, calculate the rate and the production-volume variances. Comment on the results.
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Cost Accounting A Managerial Emphasis

ISBN: 978-0133138443

7th Canadian Edition

Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

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