=+12-37 KK Activity-based costing, batch-level variance analysis OBJECTIVES 2, 3, 4 Rita’s Fleet Feet Ltd produces dance shoes for stores all over the world. While the pairs of shoes are boxed individually, they are crated and shipped in batches. The shipping department records both variable direct batch-level costs and fixed batch-level overhead costs. The following information pertains to shipping costs for 2016:

Chapter 12: Flexible budgets, overhead cost variances and management control 501 M12_HORN3377_02_LT_C12.indd 501 2/09/13 3:50 PM Static-budget amounts Actual results Pairs of shoes shipped 250 000 175 000 Average number of pairs of shoes per crate 10 8 Packing hours per crate 1.1 hours 0.9 hours Variable direct cost per hour $22 $24 Fixed overhead cost $55 000 $52 500 Required 1 What is the static budget number of crates for 2016?

2 What is the flexible budget number of crates for 2016?

3 What is the actual number of crates shipped in 2016?

4 Assuming fixed overhead is allocated using crate-packing hours, what is the predetermined fixed overhead allocation rate?

5 For variable direct batch-level costs, calculate the spending and efficiency variances.

6 For fixed overhead costs, calculate the spending and the production-volume variances.