Question

The standard costs and actual costs for factory overhead for the manufacture of 3,000 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) 3 hours per unit @ $0.70 per hour Variable overhead 3 hours per unit @ $1.97 per hour Actual Costs Total variable cost, $18,200 Total fixed cost, $8,100 The amount of the fixed factory overhead volume variance is

Answer 1

Answer:

overhead  volume variance =  $ 1970  

Explanation:

GIVE DATA:

fixed overhead = $8,100

variable overhead  =$18,200

standard hours for production = 3000*3 = 9000

standard cost per hour = 1.97+070

The total factory overhead  volume variance = Total actual OH (fixed + Variable) - Standard OH ( variable + Fixed)

= ($ 18,200 + $ 8,100 ) - ( Standard hours for actual production x Standard Cost per hour)

= $ 26,000 - [( 3000 x 3 ) hours x ( $ 1.97 + $ 0.70 ) per hour]  

= $ 26,000 - (9000 x 1.67)    

= $ 26,000 - $ 24,030    

= $ 1970    

= $ 1970