
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:
Deliveries made | 38,600 | ||
Direct labor | 31,000 | direct labor hours @ $14.00 | |
Actual variable overhead | $157,700 |
Rostand employs a
Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours.

Transcribed Image Text:Required:
1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity.
2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable.
Spending variance $
Volume variance
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