Rutherford Wheel and Axle, Inc. has an automated production process, and production activi...

Rutherford Wheel and Axle, Inc. has an automated production process, and production activity is quantified in terms of process hours. A standard-costing system is used. The annual static budget for 20x1 called for 6,000 units to be produced, requiring 30,000 machine hours. The standard overhead rate for the year was computed using this planned level of production. The 20x1 manufacturing cost report follows.

Rutherford develops flexible budgets for different levels of activity for use in evaluating performance. A total of 6,200 units was produced during 20x1. requiring 32,000 machine hours. The preceding manufacturing cost report compares the company’s actual cost for the year with the static budget and the flexible budget for two different activity levels.

Required: Compute the following amounts. For variances, indicate whether favorable or unfavorable where appropriate. Answers should be rounded to two decimal places when necessary.

1. The standard number of machine hours allowed to produce one unit of product.

2. The actual cost of direct material used in one unit of product.

3. The cost of material that should be processed per machine hour.

4. The standard direct-labor cost for each unit produced.

5. The variable-overhead rate per machine hour in a flexible-budget formula. (Hint: Use the high- low method to estimate cost behavior.)

6. The standard fixed-overhead rate per machine hour used for product costing.

7. The variable-overhead spending variance. (Assume management has determined that the actual fixed overhead cost in 20x1 amounted to $324,000.)

8. The variable-overhead efficiency variance.

9. The fixed-overhead budget variance.

10. The fixed-overhead volume variance. [Make the same assumption as in requirement (7).]

11. The total budgeted manufacturing cost (in thousands of dollars) for an output of 6,050 units. I Hint: Use the flexible-budget formula.)