Ask Question
3 April, 13:34

Cholla Company's standard fixed overhead rate is based on budgeted fixed manufacturing overhead of $27,000 and budgeted production of 30,000 units. Actual results for the month of October reveal that Cholla produced 28,000 units and spent $25,500 on fixed manufacturing overhead costs. Calculate Cholla's fixed overhead rate and the fixed overhead volume variance. (Round "Fixed Overhead Rate" to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Fixed Overhead Rate per UnitFixed Overhead Volume Variance

+5
Answers (1)
  1. 3 April, 14:16
    0
    Fixed overhead rate = budgeted fixed manufacturing overhead

    budgeted production

    = 27000

    30000

    = $ 0.90 per unit

    Absorbed Fixed overhead = Actual Output * Fixed overhead rate

    = 28000 * 0.90

    = 25200

    Budgeted Fixed overhead = Budgeted Output * Fixed overhead rate

    = 30000 * 0.90

    = 27000

    Fixed Overhead Volume Variance = Absorbed Fixed overhead - Budgeted Fixed overhead

    = | 25200 - 27000 |

    = $1800 (unfavourable)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Cholla Company's standard fixed overhead rate is based on budgeted fixed manufacturing overhead of $27,000 and budgeted production of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers