Reference no: EM133105793

Question - OG Anunoby Corporation produces a special line of basketball hoops in batches. To manufacture a batch of the basketball hoops OG Anunoby Corporation must setup the machines and moulds. 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 moulds for different styles of basketball hoops.

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 January.

	Static-budget Amounts	Actual Amounts
Basketball hoops produced and sold	30,000	28,000
Batch size (number of units per batch)	200	250
Setup hours per batch	5	4
Variable overhead cost per setup hour	$10	$9
Total fixed setup overhead costs	$22,500	$21,000

Required -

1. Calculate the efficiency variance for variable setup overhead costs.

2. Calculate the rate variance for variable setup overhead costs.

3. Calculate the flexible-budget variance for variable setup overhead costs.

4. Calculate the rate variance for fixed setup overhead costs.

5. Calculate the production-volume variance for fixed setup overhead costs.