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11.- Fixed Overhead Variances Rostand Inc. operates a delivery service for over 70 restaurants. The...

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Accounting

11.-

Fixed Overhead Variances

Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last years delivery operations:

Deliveries made 38,600
Direct labor 31,000 direct labor hours @ $14.00
Actual variable overhead $157,700

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.

Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours.

Required:

1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity. $fill in the blank 1

2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance $fill in the blank 2
FavorableUnfavorable
Volume variance $fill in the blank 4
FavorableUnfavorable

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