Santos Co. is preparing a cash budget for February. The company has $18,000 cash at the beginning of February and anticipates $6
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Answer:
Fixed Factory Overhead Volume Variance = $10,000 Unfavorable
Explanation:
Provided information we have,
Fixed Overhead standard = $2 per labor hour
This is based on maximum output of 30,000 labor hours.
Since actual hours = 25,000
Standard overhead = 25,000 $2 = $50,000
Actual Fixed Overhead = $60,000
Thus Fixed Factory Overhead Volume Variance = (Standard Overheads to be applied - Actual Overheads Applied)
= ($50,000 - $60,000)
= -$10,000
As we see the value is negative because actual overheads are more than the standard thus, it is unfavorable.
Fixed Factory Overhead Volume Variance = $10,000 Unfavorable