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Question - In addition to other costs, Finch Telephone Company planned to incur $454,080 of fixed manufacturing overhead in making 352,000 telephones. Finch actually produced 362,000 telephones, incurring actual overhead costs of $449,080. Finch establishes its predetermined overhead rate based on the planned volume of production (expected number of telephones).
Required -
a. Calculate the predetermined overhead rate.
b. Determine the fixed cost spending variance and indicate whether it is favorable (F) or unfavorable (U).
c. Determine the fixed cost volume variance and indicate whether it is favorable (F) or unfavorable (U).
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