Question 1
One possible reason for unfavorable variable overhead efficiency variance for materials handling is ________.
◦ inefficient layout of product distribution channels
◦ loosely budgeted standard hours
◦ very low wait time at work centers
◦ very tight standards for materials-handling time
Question 2
Raposa, Inc., produces a special line of plastic toy racing cars. Raposa, Inc., produces the cars in batches. To manufacture a batch of the cars, Raposa, Inc., must set up the machines and molds. 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 molds for different styles of car.
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 June 2015:
| Units produced and sold | 15,700 | 11,950 |
| Batch size (number of units per batch) | 325 | 265 |
| Setup-hours per batch | 3 | 4.25 |
| Variable overhead cost per setup-hour | $48 | $45 |
| Total fixed setup overhead costs | $11,310 | $9,010 |
Calculate the efficiency variance for variable overhead setup costs. (Round all intermediary calculations two decimal places and your final answer to the nearest whole number.)
◦ $4,810 unfavorable
◦ $435 unfavorable
◦ $4,810 favorable
◦ $435 favorable
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