Question
11.- Fixed Overhead Variances Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in
11.-
Fixed Overhead Variances
Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last years delivery operations:
Deliveries made | 38,600 | ||
Direct labor | 31,000 | direct labor hours @ $14.00 | |
Actual variable overhead | $157,700 |
Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.
Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours.
Required:
1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity. $fill in the blank 1
2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable.
Spending variance | $fill in the blank 2 | FavorableUnfavorable | |
Volume variance | $fill in the blank 4 | FavorableUnfavorable |
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