The Aanroc Manufacturing Company budget for May shows the following:

Actual results for May were as follows:

Required:
a Calculate and explain the fixed overhead cost variance.
b Explain and illustrate how the standard cost of production can be measured (i) in units, and (ii) in standard hours.
c Calculate and explain the fixed overhead expenditure, volume, capacity utilization and efficiency variances.

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Fixed overheads Number of labour hours to be worked Number of aanrocs to be produced 256,000 16,000 10,000