Layer Corporation produces a special line of hockey sticks in batches.To manufacture a batch of the hockey sticks Layer Corporation must setup the machines and moulds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and moulds for different styles of hockey sticks.Setup overhead costs consist of some costs that are variable and some costs that are fixed with
respect to the number of setup hours.The following information pertains to January. Required:
a.Calculate the efficiency variance for variable setup overhead costs.
b.Calculate the rate variance for variable setup overhead costs.
c.Calculate the flexible-budget variance for variable setup overhead costs.
d.Calculate the rate variance for fixed setup overhead costs.
e.Calculate the production-volume variance for fixed setup overhead costs.

Question

Layer Corporation produces a special line of hockey sticks in batches.To manufacture a batch of the hockey sticks Layer Corporation must setup the machines and moulds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and moulds for different styles of hockey sticks.Setup overhead costs consist of some costs that are variable and some costs that are fixed with
respect to the number of setup hours.The following information pertains to January.  Required:
a.Calculate the efficiency variance for variable setup overhead costs.
b.Calculate the rate variance for variable setup overhead costs.
c.Calculate the flexible-budget variance for variable setup overhead costs.
d.Calculate the rate variance for fixed setup overhead costs.
e.Calculate the production-volume variance for fixed setup overhead costs.

Quizplus · Accepted Answer

The Answer of Layer Corporation produces a special line of hockey sticks in batches.To manufacture a batch of the hockey sticks Layer Corporation must setup the machines and moulds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and moulds for different styles of hockey sticks.Setup overhead costs consist of some costs that are variable and some costs that are fixed with
respect to the number of setup hours.The following information pertains to January.  Required:
a.Calculate the efficiency variance for variable setup overhead costs.
b.Calculate the rate variance for variable setup overhead costs.
c.Calculate the flexible-budget variance for variable setup overhead costs.
d.Calculate the rate variance for fixed setup overhead costs.
e.Calculate the production-volume variance for fixed setup overhead costs.

Layer Corporation Produces a Special Line of Hockey Sticks in Batches.To