To the Point Manufacturing Company uses the standard costing method. The company

Question

To the Point Manufacturing Company uses thestandard costingmethod. The company's main product is a fine-quality fountain pen that normally takes 2.5 hours to produce. Normal annual capacity is 29,700 direct labor hours, and budgeted fixed overhead costs for the year were $14,900. During the year, the company produced and sold 13,600 units. Actual fixed overhead costs were $19,100.

Compute the fixed overhead rate per direct labor hour. Round your answer to two decimal places.
$per direct labor hour

Determine the fixed overhead budget and volume variances.

Explanation / Answer

Fixed overhead budget variance
= $19,100 - $14,900 = $4,200 F

Fixed Overhead Volume variance
= ($0.50 x 29,700) - $14,900 = $50 F

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