Answer:
Yolkenverst Co.
Machining Department
For the current year the department has a fixed overhead production volume variance, rounded to the nearest whole dollar, of:
= $7,148.
Explanation:
a) Data and Calculations:
Maximum capacity 62,000 units
Machine hours per unit 2.50
Variable factory overhead $ 4.20 per machine hour
Fixed factory overhead $ 432,500
Planned capacity units to be produced = 50,840 units (62,000 * 82%)
Actual capacity units produced = 50,000 units
Production volume variance = 840 units (50,840 - 50,000)
Fixed factory overhead rate of maximum capacity = $6.96 ($432,500/62,000)
Standard fixed overhead rate based on planned capacity = $8.51 ($432,500/50,840)
Fixed overhead production volume variance = production volume variance * standard fixed overhead rate based on planned capacity
= 840 * $8.51
= $7,148.4
= $7,148
