Company AG produces and sells rocket parts. The company presents the following data related to its variable
Question:
Company AG produces and sells rocket parts. The company presents the following data related to its variable and fixed indirect costs. Both costs are allocated using machine hours of Laser cutter.
Budgeted:
-Variable Indirect Cost Rate $ 200.00 per hour
-Indirect Fixed Cost Rate $ 240.00 per hour
-Hours required per piece of rocket 1.5 hours
-Units to produce and sell for 2018 5,000 pieces
-Total Indirect Fixed Cost $ 1,800,000
Results for the year 2018:
-Units produced and sold 4,800 pieces
-Hours of used laser cutter 8,400 hours
-Total variable indirect costs $ 1,478,400
-Total fixed indirect costs $ 1,832,200
Find the following variations related to the indirect cost:
a.Spending Variance the variable part
b. Efficiency Variance
c. Spending Variance the fixed part
d. Production volume Variance
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson