Answer:
Fixed overhead volume variance $ 2801.3
Explanation:
<em>The difference between budgeted Fixed Overheads and Applied Fixed Overheads gives the Fixed overhead volume variance.</em>
Given Data
(Planned )Denominator level of activity 4,600MHs
Fixed overhead cost$50,140
Actual hours 5,000MHs
Standard hours allowed for the actual output 4,743MHs
Actual total fixed manufacturing overhead cost$48,690
<em>We need Budgeted Fixed overhead and we can find it by dividing the fixed costs by the denominator level of activity and multiplying it with actual hours.</em>
<em>We also need to find Applied Fixed overhead by dividing the fixed costs by the denominator level of activity and multiplying it with standard hours for actual output.</em>
<u>Calculations</u>
Budgeted Fixed Overhead= ($50,140 /4,600MHs )* 5,000MHs
= $ 54,500
Applied Fixed overhead= ($50,140 /4,600MHs )* 4743MHs
= $ 51698.7
Formula
Fixed overhead volume variance=Budgeted Fixed overhead- Applied Fixed overhead
Fixed overhead volume variance= $ 54,500- $ 51698.7= $ 2801.3
