a

FROSTER CO. manufactures snow blowers. Operations are highly automated and both variable and fixed manufacturing overhead costs are applied to the snow blowers on the basis of machine hours as the allocation base. The audited accounting records for the completed 2020 year reported the following actual information: Actual machine hours incurred... 5,900 hours Actual direct labour hours worked 4,600 hours Actual production and sales...... 480 snow blowers Actual fixed manufacturing overhead costs: Supervisor salaries $ 41,000 Factory rent..... $ 5,000 Factory insurance $ 1,600 Actual variable manufacturing overhead costs: Factory utilities Indirect materials Machinery maintenance supplies $ 151,000 $ 76,700 $ 85,000 Consider the following budgeted/standard information pertaining to 2020: Denominator level of activity of machine hours... 6,000 hours Standard direct labour wage rate $25 per DL hour Budgeted variable manufacturing overhead (FMOH) allocation rate.... $55 per machine hour Budgeted production and sales. .500 snow blowers Standard machine hours to produce one snow blower 12 hours Budgeted total variable manufacturing overhead costs (from Static-Budget)... $330,000 Budgeted fixed manufacturing overhead (FMOH) allocation rate..... $8 per machine hour Budgeted total fixed manufacturing overhead costs (from Static-Budget). ...$48,000 Required: 1.) Compute the Spending variance and Efficiency variance for total variable manufacturing overhead (VMOH) costs for 2020. (6 marks) 2.) Compute the Budget variance and Volume variance for total fixed manufacturing overhead (FMOH) costs for 2020. (4 marks)