Problem:
Activity-based costing, batch-level variance analysis. Rica's Fleet Feet, Inc., produces dance shoes for stores all over the world. While the pairs of shoes are boxed individually, they are crated and shipped in batches. The shipping department records both variable and fixed overhead costs. The following information pertains to shipping costs for 2008.
1. What is the static budget number of crates for 2008?
2. What is the flexible budget number of crates for 2008?
3. What is the actual number of crates shipped in 2008?
4. Assuming fixed overhead is allocated using crate-packing hours, what is the predetermined fixed over-head allocation rate?
5. For variable overhead costs, compute the spending and efficiency variances.
6. For fixed overhead costs, compute the spending and the production-volumevariances.
