Manufacturing builds playground equipment that it sells to elementary schools and municipalities. Schengen's management has contracted you to perform a variance analysis on the fixed manufacturing overhead for its line of slides. Schengen's cost accounting team informs you that it allocates fixed overhead based on machine hours. This period production was budgeted at 375 slides. Budgeted and actual production data follows:

Standard fixed overhead cost per machine hour $11

Standard machine hours per slide 6

Actual production 395

Actual fixed overhead cost $27,50

What is the fixed manufacturing overhead volume variance in this period?

A. $18,425 unfavorable.

B. $15,975 unfavorable.

C. $15,975 favorable.

D. $18,425 favorable.

Question

Business

Lauren Camacho

21 October, 00:19

Manufacturing builds playground equipment that it sells to elementary schools and municipalities. Schengen's management has contracted you to perform a variance analysis on the fixed manufacturing overhead for its line of slides. Schengen's cost accounting team informs you that it allocates fixed overhead based on machine hours. This period production was budgeted at 375 slides. Budgeted and actual production data follows:

Standard fixed overhead cost per machine hour $11

Standard machine hours per slide 6

Actual production 395

Actual fixed overhead cost $27,50

What is the fixed manufacturing overhead volume variance in this period?

A. $18,425 unfavorable.

B. $15,975 unfavorable.

C. $15,975 favorable.

D. $18,425 favorable.

+5

Answers (1)

Know the Answer?

Libby Estrada · Answer 1

Volume variance $1,320 Favorable

Explanation:

The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit.

Standard fixed overhead cost per unit = $11*6 = 116

Units

Budgeted units 375

Actual units 395

Volume variance 20

Standard fixed overhead cost * $66

Volume variance $1,320 Favorable