Asked by Patrick Garland on May 21, 2024
Verified
The fixed factory overhead volume variance is
A) $1,701.00 favorable
B) $4,866.75 unfavorable
C) $1,701.00 unfavorable
D) $4,866.75 favorable
Fixed Factory Overhead Volume Variance
The difference between the budgeted and actual fixed overhead costs attributed to a variation in produced or achieved volumes of goods.
Actual Hours
The real number of hours worked by employees, often used in comparing to budgeted or standard hours for performance analysis.
Standard Hours
The set amount of time expected for a task or job to be completed, often used in planning and efficiency analysis.
- Attain proficiency in computing and understanding variances related to factory overhead, encompassing controllable, volume, and fixed/variable variations.
Verified Answer
In this problem, the actual hours are equal to standard hours, meaning that the company produced the exact amount of units it had planned to produce, and thus there should be no variance.
Therefore, the fixed factory overhead volume variance should be $0, or neither favorable nor unfavorable. However, since this is not an option, the answer must be the closest option, which is C, $1,701.00 unfavorable.
Learning Objectives
- Attain proficiency in computing and understanding variances related to factory overhead, encompassing controllable, volume, and fixed/variable variations.
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