fixed overhead variance analysis this problem is a continuation of the previous prob 1571569

Fixed Overhead Variance Analysis . (This problem is a continuation of the previous problem but can also be worked independently.) Rain Gear, Inc., produces rain jackets and applies fixed manufacturing overhead costs to products based on direct labor hours. Information for the year appears as follows. Rain Gear expected to produce and sell 28,000 units for the year.

Required: a. Calculate the fixed overhead spending variance and production volume variance using the format shown in Figure 10.13 “Fixed Manufacturing Overhead Variance Analysis for Jerry’s Ice Cream”. Clearly label each variance as favorable or unfavorable.

b. Company policy is to investigate all variances greater than 5 percent of the flexible budget amount. Identify whether either of the two fixed overhead variances calculated in requirement a should be investigated.

c. Provide one possible explanation for variance(s) identified in requirement b.