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In addition to other costs, Grosha Telephone Company planned to incur $600,000 of fixed manufacturing overhead in making 500,000 telephones. Grosha actually produced 508,000 telephones,
In addition to other costs, Grosha Telephone Company planned to incur $600,000 of fixed manufacturing overhead in making 500,000 telephones. Grosha actually produced 508,000 telephones, incurring actual overhead costs of $599,400. Grosha establishes its predetermined overhead rate based on the planned volume of production (expected number of telephones). Required a. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) b. Determine the fixed cost spending variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) c. Determine the fixed cost volume variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) per unit a. b. c. Predetermined overhead rate Total fixed cost spending variance Total fixed cost volume variance
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