. Sun Mountain, a stock door and trim molding manufacturer, located in Berthoud, Colorado uses a standard cost system for their stock molding in which manufacturing overhead is applied to units of product on the basis of standard machine-hours. According to the standards, each unit of stock molding product requires one machine-hour to complete. The standard variable overhead is $1.75 per machine-hour and Budgeted Fixed Manufacturing Costs are $300,000 per year. The denominator level of activity is 150,000 machine-hours (or 150,000 units).

Actual data for the year were as follows:

Actual variable overhead cost $211,680

Actual fixed manufacturing overhead cost $315,000

Actual machine-hours 126,000 hrs.

Actual units produced 120,000 units

REQUIRED:

1. What are the predetermined variable and fixed manufacturing overhead rates for the year?

2. Compute the variable overhead rate (spending) variance for the year.

3. Compute the variable efficiency variance for the year.

4. Compute the fixed manufacturing overhead budget variance for the year.

5. Compute the fixed volume variance for the year.