Answer the following question(s)using the information below.Cakewalk Ltd.delivers shoes in batches.The following information pertains to shipping dance shoes in June:

-What is the Cakewalk Ltd.rate variance for fixed shipping overhead costs?
A)$900 U
B)$600 F
C)$800 U
D)$800 F
E)$600 U

Question

Answer the following question(s)using the information below.Cakewalk Ltd.delivers shoes in batches.The following information pertains to shipping dance shoes in June:
 
-What is the Cakewalk Ltd.rate variance for fixed shipping overhead costs?
A)$900 U 
B)$600 F 
C)$800 U 
D)$800 F 
E)$600 U

Quizplus · Accepted Answer

To find the rate variance for fixed shipping overhead costs, we need to use the formula:
Rate Variance = (Actual Fixed Shipping Costs - Budgeted Fixed Shipping Costs) / Actual Number of Shoes Shipped
Based on the given information:
Actual Fixed Shipping Costs = $25,000
Budgeted Fixed Shipping Costs = ($0.50 x 48,000) + $20,000 = $44,000
Actual Number of Shoes Shipped = 82,000
Rate Variance = ($25,000 - $44,000) / 82,000 = $800 U (Option C)

Answer the Following Question(s)using the Information Below