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Layt Clock Company has developed the following flexible budget for its overhead costs. Manufacturing overhead at Layt is applied to production on the basis of standard machine-hours:
Machine Hours
21,600
24,000
26,400
Clocks produced
18,000
20,000
22,000
Variable overhead cost
$127,440
$141,600
$155,760
Fixed overhead cost
$171,072
Layt was expecting to produce 22,000 clocks last year. The actual results for the year were as follows:
Number of clocks produced
21,500
Machine-hours incurred
24,940
$145,899
$170,540
Required:
Compute all four manufacturing overhead variances for Layt.
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