Layt Clock Company has developed the following flexible budget for its overhead costs. Manufacturing overhead at Layt is applied to production on the basis of standard machine-hours:
|
Machine Hours
|
|
21,600
|
24,000
|
26,400
|
|
Clocks produced
|
18,000
|
20,000
|
22,000
|
|
Variable overhead cost
|
$127,440
|
$141,600
|
$155,760
|
|
Fixed overhead cost
|
$171,072
|
$171,072
|
$171,072
|
Layt was expecting to produce 22,000 clocks last year. The actual results for the year were as follows:
|
Number of clocks produced
|
21,500
|
|
Machine-hours incurred
|
24,940
|
|
Variable overhead cost
|
$145,899
|
|
Fixed overhead cost
|
$170,540
|
Required:
Compute all four manufacturing overhead variances for Layt.