Activity-based costing, variance analysis. Asma Surgical Instruments, Inc., makes a special line of forceps, SFA, in batches. Asma 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 2007:

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 $34,650 $32,659 Required 1. For variable testing overhead costs, compute the efficiency and spending variances.

Comment on the results.

2. For fixed testing overhead costs, compute the spending and the production-volume vari¬

ances. Comment on the results.