Fatal Inc.manufactures parachutes.Fixed and variable manufacturing cost pools are allocated to each parachute using budgeted assembly hours.Budgeted assembly time is 4 hours per unit.The following table presents the amounts for July. Required:
a.Calculate the efficiency variance for variable overhead costs.
b.Calculate the rate variance for variable overhead costs.
c.Calculate the rate variance for fixed overhead costs.
d.Calculate the production-volume variance for fixed overhead costs.

Question

Fatal Inc.manufactures parachutes.Fixed and variable manufacturing cost pools are allocated to each parachute using budgeted assembly hours.Budgeted assembly time is 4 hours per unit.The following table presents the amounts for July.  Required:
a.Calculate the efficiency variance for variable overhead costs.
b.Calculate the rate variance for variable overhead costs.
c.Calculate the rate variance for fixed overhead costs.
d.Calculate the production-volume variance for fixed overhead costs.

Quizplus · Accepted Answer

The Answer of Fatal Inc.manufactures parachutes.Fixed and variable manufacturing cost pools are allocated to each parachute using budgeted assembly hours.Budgeted assembly time is 4 hours per unit.The following table presents the amounts for July.  Required:
a.Calculate the efficiency variance for variable overhead costs.
b.Calculate the rate variance for variable overhead costs.
c.Calculate the rate variance for fixed overhead costs.
d.Calculate the production-volume variance for fixed overhead costs.

Fatal IncManufactures Parachutes