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Accurate-Time Company Makes Watches

question 129

Essay

Accurate-time Company makes watches.The fixed overhead costs for 2018 total $444 000.The company uses direct labour-hours for fixed overhead allocation and anticipates 14 800 hours during the year for 780 000 units.An equal number of units is budgeted for each month.
During October,58 000 watches were produced and $28 000 was spent on fixed overhead.
Required:
a.Determine the fixed overhead rate for 2018 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.
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Definitions:

Reject

In statistical testing, to dismiss the null hypothesis based on evidence that supports the alternative hypothesis.

H0

The notation for the null hypothesis in statistical hypothesis testing, representing no effect or no difference.

Reject

In statistical analysis, to refuse the null hypothesis, concluding there is sufficient evidence to support a significant effect or difference.

H0

Stands for the null hypothesis in statistical hypothesis testing, representing the assumption that there is no significant difference or effect.

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