Xenon Company Makes Watches

question 16

Essay

Xenon Company makes watches.The fixed overhead costs for 2015 total $648,000.The company uses direct labor-hours for fixed overhead allocation and anticipates 21,600 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 $52,000 was spent on fixed overhead.
Required:
a.Determine the fixed overhead rate for 2015 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:

Economic Duress

A situation where a party is forced to enter into a contract under severe financial pressure, making the agreement voidable.

Gallium Arsenide

A compound of gallium and arsenic that is used in semiconductor devices, including integrated circuits and photovoltaic cells.

Monopoly

A market structure characterized by a single seller, offering a unique product or service without close substitutes, leading to control over pricing.

Mutual Mistake

A legal doctrine where both parties entering into a contract have an incorrect belief about an important fact, potentially rendering the contract voidable.