Asked by Andrea Cannon on Jul 08, 2024
Verified
The fixed manufacturing overhead volume variance for the period is closest to:
A) $1,870 F
B) $1,928 F
C) $643 U
D) $2,570 F
Fixed Manufacturing Overhead Volume Variance
The difference between the budgeted and actually applied fixed manufacturing overhead, based on standard costs for a given period.
- Determine and expand upon the variances tied to fixed and variable overhead costs, such as budget discrepancies, volume differences, and efficiency variances.
Verified Answer
IC
Ivania CoreasDiazJul 13, 2024
Final Answer :
B
Explanation :
Fixed Manufacturing Overhead Volume Variance = Budgeted Fixed Overhead - (Standard Hours Allowed x Fixed Overhead Rate)
Budgeted Fixed Overhead = $176,800
Standard Hours Allowed = 11,200 (8,000 actual hours + 40% of 8,000 as per standard)
Fixed Overhead Rate = $20 per hour
Fixed Manufacturing Overhead Volume Variance = $176,800 - (11,200 x $20) = $1,928 F
Budgeted Fixed Overhead = $176,800
Standard Hours Allowed = 11,200 (8,000 actual hours + 40% of 8,000 as per standard)
Fixed Overhead Rate = $20 per hour
Fixed Manufacturing Overhead Volume Variance = $176,800 - (11,200 x $20) = $1,928 F
Explanation :
Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost ÷ Estimated total amount of the allocation base = $47,545 ÷ 3,700 MHs = $12.85 per MH
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $47,545 - (3,850 MH × $12.85 per MH)
= $47,545 - $49,472.50
= $1,927.50 F
Reference: APP10A-Ref14
(Appendix 9A)Rainbolt Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $47,545 - (3,850 MH × $12.85 per MH)
= $47,545 - $49,472.50
= $1,927.50 F
Reference: APP10A-Ref14
(Appendix 9A)Rainbolt Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:
Learning Objectives
- Determine and expand upon the variances tied to fixed and variable overhead costs, such as budget discrepancies, volume differences, and efficiency variances.