Hunters, Inc

question 29

Essay

Hunters, Inc. uses a standard cost system when accounting for its sole product. Manufacturing overhead is applied to production on the basis of process hours. Planned activity is 60,000 process hours per month, which gives rise to the following per-unit standards:
Variable overhead: 13 hours at $15 per hour
Fixed overhead: 13 hours at $7 per hour
During September, 5,100 units were produced and the company incurred the following overhead costs: variable, $942,500; fixed, $429,000. Actual process hours totaled 65,000.
Required:
A. Calculate the spending and efficiency variances for variable overhead.
B. Calculate the budget and volume variances for fixed overhead.

---

Definitions:

Power

The probability that a statistical test will correctly reject a false null hypothesis, or the test's sensitivity to detecting an effect.

Statistical Test

A procedure used to determine whether the observed data significantly deviates from a hypothesis.

Inferential Statistics

A branch of statistics that infers properties about a population based on a sample of data drawn from that population.

Descriptive Statistics

Values that organize and describe the characteristics of a collection of data, sometimes called a data set.