Chapter 9, Problem 16E

To determine

(a)

Concept introduction:

Fixed overhead rate variances:

It is calculated by dividing fixed manufacturing overhead costs with budgeted production of the company.

To compute:

The fixed overhead rate based on budgeted production.

To determine

(b)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of SC company.

To determine

(c)

Concept introduction:

Fixed overhead volume variance:

It is the difference betweenthe fixed overhead incurred actually to manfacture goods as per the volume which is calculated by multiplying fixed overhead rate with actual volume and the fixed overhead that ought to be incurred i.e. budgted to manfacture goods as per the volume which is calculated by multiplyingfixed overhead rate with budgeted volume.

To compute:

Thefixed overhead volume variance.

To determine

(d)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.