Question

Answer the following questions using the information​ below: ​Munoz, Inc., produces a special line of plastic toy racing cars.​ Munoz, Inc., produces the cars in batches. To manufacture a batch of the​ cars, Munoz,​ Inc., must set up the machines and molds. Setup costs are​ batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of car. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of​ setup-hours. The following information pertains to June​ 2011: Actual Amounts ​Static-budget Amounts Units produced and sold ​15,000 ​10,000 Batch size​ (number of units per​ batch) 250 200 ​Setup-hours per batch 5 5.2 Variable overhead cost per​ setup-hour ​$40 ​ $38 Total fixed setup overhead costs ​$12,000 ​$9,880 Calculate the efficiency variance for variable setup overhead costs.

Answer 1

Answer:

1900 Favorable

Explanation:

Efficiency Variance (Standard Hours-Actual Hours)*Standard rate

(15000/225*5.25- 15000/250*5)*38 = 1900 F