Bauer Manufacturing produces premium dog houses. Each dog house requires 2.0 hours of machine time for its elaborate trim and finishing. For the current year, Bauer calculated its predetermined fixed manufacturing overhead (MOH) rate to be $24 per machine hour. Bauer budgets its fixed MOH to be $50,000 per month. Last month, Bauer produced 1,200 dog houses and incurred $53,000 (actual) of fixed MOH.
Requirements
1. Calculate the fixed overhead budget variance.
2. Calculate the fixed overhead volume variance.