Brown Company Makes Watches

Essay

Brown Company makes watches.The budgeted fixed overhead costs for 2019 total $324,000.The company uses direct labour-hours for fixed overhead allocation and anticipates 10,800 hours during the year for 540,000 units.An equal number of units are budgeted for each month.During October, 48,000 watches were produced and $28,000 was spent on fixed overhead.Required:
a.Determine the fixed overhead rate for 2019 based on the units of input.
b.Determine the fixed overhead static-budget variance for October.
c.Determine the production-volume overhead variance for October.