Business

Trouble

15 July, 21:30

Answer the following questions using the information below: 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 batch-level 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 setup-hours. The following information pertains to June 2011: Actual Amounts Static-budget Amounts Units produced and sold 15,000 10,000 Batch size (number of units per batch) 250 200 Setup-hours per batch 5 5.2 Variable overhead cost per setup-hour $40 $38 Total fixed setup overhead costs $12,000 $9,880 Calculate the efficiency variance for variable setup overhead costs.