Question: Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labour-hours (DMLH) per suit. Data pertaining to fixed manufacturing overhead costs for

Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labour-hours (DMLH) per suit. Data pertaining to fixed manufacturing overhead costs for June 2013 are $62,400 budgeted and $63,916 actual.

REQUIRED

1. Compute the rate variance for fixed manufacturing overhead. Comment on these results.

2. Compute the production-volume variance for June 2013. What inferences can Esquire Clothing draw from this variance?

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