51. (Combined overhead rates) Rocky Mountain Industries manufactures a downfilled sleeping bag with the following standard cost information for 2001:

• Each sleeping bag requires 1 hour of machine time to produce.

• Variable overhead: $9 per machine hour

• Fixed overhead: $12 per machine hour; calculated as total budgeted overhead divided by expected annual capacity of 30,000 machine hours Production Statistics for 2001:

Number of sleeping bags produced 31,000 units Actual machine hours 33,300 hours Variable overhead cost incurred $266,400 Fixed overhead cost incurred $353,500

a. Using a combined overhead rate, calculate variances according to the twovariance approach.

b. Using a combined overhead rate, calculate variances according to the threevariance approach.