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In Sheffield Inc.$\text{'}$s first year of operations, the company was a bit overzealous when estimating the market demand for its products. As a result, it had a fair number of its milk frothers left in the warehouse as it began its second year of operations. Management believed Year $2$ sales would be better, so it stuck with the same plan for production in Year $2$ as in Year $1-8,500$ units. Sheffield uses standard costing within its absorption costing system; its inventory cost per unit last year was the same as this year's. There were no price or efficiency variances this year, but any other variances are written off directly to COGS. The following chart provides details for Year $2$ activity.

Budgeted fixed$-$MOH cost

Budgeted variable manufacturing cost

Budgeted fixed operating cost

Budgeted variable operating cost

Beginning FG Inventory

Actual production

$$85,000$

$$4\mathrm{.}40$ per unit

$$38,000$

$$2\mathrm{.}00$ per unit

$1,800$ units

$7,800$ units

Your answer is correct.

Calculate Sheffield's fixed$-$MOH volume variance for its second year in business $($identify amount and sign$).$

Fixed $-$MOH volume variance

$

Prepare Sheffield's Year $2$ income statement in good form, recognizing sales of $8,500$ units at $$24$ per unit. $($Round inventory cost per unit to $2$ decimal places, es$.15\mathrm{.}25$ and final answers to $0$ dedimal places, eg$.5,125.)$

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eTextbook and Media

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Attempts: O of $3$ used

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