Question

Dickson Sporting Goods Co. manufactures baseballs. According to Dickson’s 2016 budget, the company planned to incur $360,000 of fixed manufacturing overhead costs to make 200,000 baseballs. Dickson actually produced 187,000 balls, incurring $355,200 of actual fixed manufacturing overhead costs. Dickson establishes its predetermined overhead rate on the basis of the planned volume of production (expected number of baseballs).

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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  • CreatedFebruary 07, 2014
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