Problem 4: Casey Corporation Casey Corporation produces a special line of basketball hoops. Casey Corporation produces the hoops in batches. To manufacture a batch of the basketball hoops, Casey Corporation 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 basketball hoops Casey Corp. planned to sell its hoops for $90 each during the budgeting process, but actual selling price was $100/unit. The "recipe" for the basketball hoop includes . 3 lbs of metal, at a standard cost of $1.50/lb * 2 hours of direct labor, at a standard cost of $10/hour Actual direct materials costs were $145,000 for 85,000 lbs; direct labor costs were $550,000 for 54,000 hours Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to January 2019. Static Budget Amounts Actual Amounts Basketball hoops produced and sold30,000 Batch size (number of units per batch) 200 Setup-hours per batch Variable overhead cost per setup hour $10 Total fixed setup overhead costs 28,000 250 4 $9 $21,000 $22,500 1. 2. 3. 4. 5. Calculate the efficiency variance for variable overhead setup costs Calculate the spending variance for variable overhead setup costs Calculate the flexible-budget variance for variable overhead setup costs. Calculate the spending variance for fixed overhead setup costs. Calculate the production-volume variance for fixed overhead setup costs