Author Question: Raposa, Inc., produces a special line of plastic toy racing cars. Raposa, Inc., produces the cars in ... (Read 123 times)

SO00 · **on:** Mar 6, 2021

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:

Actual

Static-budget

Amounts

Units produced and sold

14,800

11,800

Batch size (number of units per batch)

285

245

Setup-hours per batch

2

2.75

Variable overhead cost per setup-hour

$48

$45

Total fixed setup overhead costs

$8,670

$6,620

Calculate the flexible-budget variance for variable overhead setup costs. (Round all intermediary calculations two decimal places and your final answer to the nearest whole number.)
◦ $312 favorable
◦ $2,490 favorable
◦ $312 unfavorable
◦ $2,490 unfavorable

bpool94 · **Reply #1 on:** Mar 6, 2021

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