Aproduction facility produces metal fasteners, and realizes a profit of $800 per machine per month for 10 machines. each machine requires cooling water to keep it running effectively. management wishes to install more machinery, but the cooling water available cannot keep up with unlimited demand, and adding more machines would cause them all to run more slowly. each additional machine reduces profit by $25 per month. thus with 10 machines, the profit is $8000 (= 800 x 10). for 11 machines the profit is $8525 [= (800 – 25) x 11]. likewise for 12 machines, the profit is $9000 [= (800 – 2(25)) x 12]. determine the optimum number of machines that should be installed to maximize profit.

Oerstman, inc. uses a standard costing system and develops its overhead rates from the current annual budget.the budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours.(practical capacity is 500,000 hours)annual budgeted overhead costs total $772,800, of which $556,800 is fixed overhead.a total of 119,300 units, using 478,000 direct labor hours, were produced during the year.actual variable overhead costs for the year were $260,400 and actual fixed overhead costs were $555,450.required: 1. compute the fixed overhead spending variance and indicate if favorable or unfavorable.2. compute the fixed overhead volume variance and indicate if favorable or unfavorable.