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Munoz, Inc. produces a special line of plastic toy racing cars. Munoz, Inc. produces the cars in batches. To manufacture a batch of the cars.
Munoz, Inc. produces a special line of plastic toy racing cars. Munoz, Inc. produces the cars in batches. To manufacture a batch of the cars. Munoz, Inc. must set up the machines and molds. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of car. Setup overhead costs consist of some costs that are vanable and some costs that are fixed with respect to the number of setup hours. The following information pertains to June 2015 Actual Static-budget Amounts Amounts Units produced and sold 15.000 11,250 Batch size (number of units per batch) 250 225 Setup.hours per batch 5 5.25 Variable overhead cost per setup-hour $40 $38 Total fixed setup overhead costs $12,000 $9.975 Calculate the efficiency variance for variable overhead setup costs. $600 unfavorable $1.900 favorable $1.900 unfavorable 5600 favorable
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