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I need a step by step solution for Chapter 8 Problem 37 for textbook Cost Accounting: A Managerial Emphasis. Horngren15th edition. Activity-based costing, batch-level variance
I need a step by step solution for Chapter 8 Problem 37 for textbook Cost Accounting: A Managerial Emphasis. Horngren15th edition.
Activity-based costing, batch-level variance analysis. Rae Steven Publishing Company specializes in printing specialty textbooks for a small but profitable college market. Due to the high setup costs for each batch printed, Rae Steven holds the book requests until demand for a book is approximately 520. At that point Rae Steven will schedule the setup and production of the book. For rush orders, Rae Steven will produce smaller batches for an additional charge of $987 per setup. Budgeted and actual costs for the printing process for 2014 were as follows Static-Budget Amounts Actual Results 197,600 Number of books produced 225,680 Average number of books per setup 496 7.5 hours Hours to set up printers 7 hours Direct variable cost per setup-hour $130 $70 Total fixed setup overhead costs $53,200 $68,000 1. What is the static budget number of setups for 2014? 2. What is the flexible budget number of setups for 2014? 3. What is the actual number of setups in 2014? 4. Assuming fixed setup overhead costs are allocated using setup-hours, what is the predetermined fixed setup overhead allocation rate? 5. Does Rae Steven's charge of $987 cover the budgeted direct variable cost of an order? The budgeted total cost? 6. For direct variable setup costs, compute the price and efficiency variances. 7. For fixed setup overhead costs, compute the spending and the production-volume variances. 8. What qualitative factors should Rae Steven consider before accepting or rejecting a special orderStep by Step Solution
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