Question
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing overhead. The firm
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing overhead. The firm traces all direct costs to products, and it assigns overhead based on direct labor hours. The company budgeted $10,120 variable overhead and 2,300 direct labor hours to manufacture 4,600 pairs of boots in March. The factory used 4,300 direct labor hours in March to manufacture 4,400 pairs of boots and spent $17,400 on variable overhead during the month. For March the Platter Valley factory of Bybee Industries budgeted $94,300 of fixed overhead. Its practical capacity is 2,300 direct labor hours per month (to manufacture 4,600 pairs of boots). The actual fixed overhead incurred for the month was $97,900.
1. the total flexible-budget variance and the fixed overhead production volume variance for March.
2. Determine the flexible-budget variance and the fixed overhead production volume variance for March.
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