Question

Potter Manufacturing Company established a predetermined fixed overhead cost rate of $160 per unit of product. The company planned to make 19,000 units of product but actually produced 20,000 units. Actual fixed overhead costs were $3,200,000.

Required
a. Determine the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U). Explain what this variance means. Identify the manager(s) who is (are) responsible for the variance.
b. Determine the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U). Explain what the designations favorable and unfavorable mean with respect to the fixed manufacturing overhead cost volume variance.



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  • CreatedFebruary 07, 2014
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