The Fenmore Company Uses Standard Costing for Direct Materials and Direct

Essay

The Fenmore Company uses standard costing for direct materials and direct labour. Management would like to use standard costing for variable and fixed overhead also.
The following monthly cost functions were developed for manufacturing overhead items: The cost functions are considered reliable within a relevant range of 30,000 to 55,000 direct labour hours.
Fenmore expects to operate at 40,000 direct labour hours per month.
Information for the month of September is as follows: a. Calculate the standard manufacturing overhead rate based upon expected capacity showing the
breakdown between the fixed overhead rate and the variable overhead rate.
b. Calculate the variable manufacturing overhead spending variance.
c. Calculate the variable manufacturing overhead efficiency variance.
d. Calculate the fixed manufacturing overhead budget variance.
e. Calculate the fixed manufacturing overhead volume variance.