Regal Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). VMOH cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June

2018,

each suit is budgeted to take 4 labour-hours. Budgeted VMOH costs per labour-hour are $12.00. The budgeted number of suits to be manufactured in June

2018

is

1,120

and the actual number of suits started and completed is

1,160.

Regal

Clothing allocates FMOH to each suit using budgeted (DMLH) per suit. Data pertaining to (FMHO) for June

2018

are

$72,800

budgeted and

$63,890

actual.

1. Calculate the rate variance for FMOH. Comment on these results. 2. Calculate the production-volume variance for June 2018. What inferences can Regal Clothing draw from this variance? 3. Calculate the over- or underallocated FMOH. What does this tell the management about June's performance?