Question:
FrontGrade Systems allocates manufacturing overhead based on machine hours. Each connector should require 11 machine hours. According to the static budget, FrontGrade expected to incur the following:
1,100 machine hours per month (100 connectors * 11 machine hours per connector)
$5,500 in variable manufacturing overhead costs
$8,250 in fixed manufacturing overhead costs
During August, FrontGrade actually used 1,000 machine hours to make 110 connectors and spent $5,600 in variable manufacturing costs and $8,300 in fixed manufacturing overhead costs.
1. FrontGrade's predetermined standard variable manufacturing overhead rate is
a. $5.00 per machine hour.
b. $5.50 per machine hour.
c. $7.50 per machine hour.
d. $12.50 per machine hour.
2. Calculate the variable overhead spending variance for FrontGrade.
a. $450 F
b. $600 U
c. $1,050 F
d. $1,650 F
3. Calculate the variable overhead efficiency variance for FrontGrade.
a. $450 F
b. $600 U
c. $1,050 F
d. $1,650 F