Munoz, Inc., produces a special line of plastic toy racing cars. Munoz, Inc., produces the cars in batches. To manufacture a batch of the cars, Munoz, Inc., must set up the machines and molds. Setup costs are batchlevel 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 setuphours. The following information pertains to June :
Actual Staticbudget
Amounts Amounts
Units produced and sold
Batch size number of units per batch
Setuphours per batch
Variable overhead cost per setuphour $ $
Total fixed setup overhead costs $ $
Calculate the productionvolume variance for fixed overhead setup costs.
Question options:
$ unfavorable
$ unfavorable
$ favorable
$ favorable
none of the above.
