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:

Product

An item or service created through a process and offered for sale to satisfy wants or needs of consumers.

Service

Activities or functions provided by one party to another, often in exchange for payment, that do not result in the ownership of anything.

Viral Marketing

A marketing strategy that encourages individuals to share a marketing message, often through social media, to spread information about a product or service rapidly.

Social Media

Social media encompasses websites and applications that enable users to create and share content or to participate in social networking.