36) Timely Products Company makes watches. The fixed overhead costs for 2017 total $648,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 21,600 hours during the year for 540,000 units. An equal number of units are budgeted for each month. During October, 48,000 watches were produced and $52,000 was spent on fixed overhead. Required:a.Determine the fixed overhead rate for 2017 based on the units of input.b.Determine the fixed overhead static-budget variance for October.c.Determine the production-volume overhead variance for October. Answer:
Diff: 3Objective: 4AACSB: Analytical thinking37) Explain why there is no efficiency variance for fixed manufacturing overhead costs.
Diff: 2Objective: 4AACSB: Analytical thinking38) 'Managers should be wary of using the same unitized fixed overhead costs for planning and control purposes'. Do you agree with this argument? Give reasons for your answer.