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 year's delivery operations:

Deliveries made	38,800
Direct labor	31,400	direct labor hours @ $16.00
Actual variable overhead	$171,000

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.50 per hour was used. The labor standard requires 0.80 hour per delivery.

Assume that the actual fixed overhead was $371,800. Budgeted fixed overhead was $368,000, 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. $

2. Compute the fixed overhead spending and volume variances.

Spending variance	$
Volume variance	$