Computing fixed cost variances In addition to other costs, Fenwick Telephone Company planned to incur $441,000 of fixed manufacturing overhead in making 350,000 telephones. Fenwick actually produced 359,000 telephones, incurring actual overhead costs of $447,000. Fenwick establishes its predetermined overhead rate based on the planned volume of production (expected number of telephones).

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).