Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour per bat. Total manufacturing overhead costs were estimated at $9,450, of which the variable portion was $0.50 per bat and the fixed portion was $1.00 per bat with an estimate of 6,300 bats to be produced. Flagstaff identifies price variances at the earliest possible point in time. During March, the company had the following results:Direct labor used = 4,800 hours at a cost of $56,400Actual manufacturing overhead fixed costs = $6,000Actual manufacturing overhead variable costs = $3,100Bats produced = 6,000Instructions Compute the following variances for March.
1. Labor quantity variance
2. Total labor variance
3. Overhead controllable variance
4. Overhead volume variance

1. $3,600 (Favorable)

2.$2,400 (Favorable)

3. $200 (Favorable)

4. $299 (Unfavorable)

Explanation:

1. Labor quantity variance = (Actual hours * Standard rate) - ( Standard hours * Standard rate)

= (4,800* $12) - {(3/4 * 6,000) * $12)

= $57,600 - $54,000

= $3,600 (Favorable)

2. Total labor variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)

= (4,800 * $11.75) - {(3/4 * 6,000) * $12}

= $56,400 -  $54,000

= $2,400 (Favorable)

3. Overhead controllable variance = Actual overhead - Overhead budgeted

= ($3,100 + $6,000) - {($0.50 * 6,000) +  $6,300}

=$9,100 - $9,300

= $200 (Favorable)

4. Overhead volume variance = (Normal hours - Standard hours) * Fixed overhead rate

= {(6,300 * 3/4) - 4,500} * ($1.00 + 3/4)

= 225 * $1.33

= $299.25 (Unfavorable)

the answer is: a greater percentage chance of loss

high risk investments had the characteristic of higher percentage of great return accompanied with higher percentage chance of loss.

this type of investments usually only suitable for investors that have enough capital to survive in case one or more of their investments fail. examples of high-risk investments are stocks and currencies.