Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles

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Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:

Deliveries made......................................................... 38,600
Direct labor 31,000 direct labor hours ..............@ $14.00
Actual variable overhead .....................................$157,700

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. Refer to the information for Rostand Inc. above. Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours.


Required:
1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity.
2. Compute the fixed overhead spending and volume variances.

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Managerial Accounting The Cornerstone Of Business Decision Making

ISBN: 9780357715345

8th Edition

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

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