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Exercise #2: Montreal Scholastic Supply Company uses a standard-costing system. The firm estimates that it will operate its manufacturing facilities at 800,000 machine hours for the year. The estimate for total budgeted overhead is $2,000,000. The standard variable-overhead rate is estimated to be $2 per machine hour or $6 per unit. The actual data for the year are presented below. Actual finished units = 250,000 Actual machine hours = 764,000 Actual variable overhead = $1,701,000 Actual fixed overhead = $392,000 Required: Compute the following variances. Indicate whether each is favorable or unfavorable, where appropriate. a. Variable-overhead spending variance b. Variable-overhead efficiency variance c. Fixed-overhead budget variance d. Fixed-overhead volume variance 7 ACCT 303 Lesson 12 Workbook Exercise #3: The following data pertain to Aurora Electronics for the month of February. Static Budget Actual Units sold 10,000 9,000 Sales revenue $120,000 $103,500 Variable manufacturing cost $40,000 $36,000 Fixed manufacturing cost $20,000 $20,000 Variable selling and $10,000 $9,000 administrative cost Fixed selling and $10,000 $10,000 administrative cost Required: 1. Compute the sales-price and sales-volume variances for February. ACCT 303 Lesson 12 Workbook 8

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