Question

The following data are given for Bahia Company: Budgeted production 1,000 units Actual production 980 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 $14.00 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 direct labor hour Actual variable overhead costs $15,500 Overhead is applied on standard labor hours. The fixed factory overhead volume variance is a.$65 unfavorable> b.$540 unfavorable c.$65favorable d.$540 favorable

Answer 1

Answer:

Volume overhead  $ 540  unfavorable

Explanation:

The volume overhead is the difference between the budgeted units and actual units multiplied by the cost unit

Fixed over cost per unit =budgeted cost/Budgeted unit

                                        = $27,000/1000 units

                                        = $27

Volume variance

                                                                          Units

Budgeted unit                                                  1000

Actual unit                                                          980

Difference                                                             20 unfavorable

Standard fixed overhead per unit                   × $27

Volume overhead                                             540  unfavorable