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Crazy boy [7]
3 years ago
8

The following data are given for Bahia Company: Budgeted production (at 100% of normal capacity) 1,000 units Actual production 9

80 units Materials: Standard price per pound $2.00 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor: Standard hourly labor rate $14 per hour Standard hours allowed per completed unit 4.5 Actual labor hours worked 4,560 Actual total labor costs $62,928 Overhead: Actual and budgeted fixed overhead $27,000 Standard variable overhead rate $3.50 per standard labor hour Actual variable overhead costs $15,500 Overhead is applied on standard labor hours. The fixed factory overhead volume variance is:__________
a. $65 favorable
b. $540 unfavorable
c. $540 favorable
d. $65 unfavorable
Business
1 answer:
Lapatulllka [165]3 years ago
5 0

Answer:

Fixed overhead volume variance   $540   unfavorable

Explanation:

<em>The fixed overhead volume variance is the difference between the budgeted and actual production volume multiplied by the standard fixed production overhead rate per unit.</em>

Overhead absorption rate = Budgeted Fixed overhead/Budgeted units

                                            = 27,000/1000 =$27 per unit

                                                               Unit

Budgeted production                         1000

Actual production                              <u> 980</u>

Volume variance                                  20

Standard fixed overhead cost           $<u>27</u>

Fixed overhead volume variance       <u> $540</u>   unfavorable

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