Conform AI planned to produce 6,000 units but only produced 5,300 for the current year. They had a beginning inventory of 300 units with variable manufacturing cost of $11 per unit. Budgeted fixed MOH for the year was $72,000 with actual costs incurred of $66,000. What will Conform AI report as total overhead variance for the current year?
A)$2,400 F.
B)$2,400 U.
C)$6,000 F.
D)$6,000 U.

Question

Quizplus · Accepted Answer

$72,000 ÷ 6,000 = $12 per unit.
5,300 x $12 = $63,600
$66,000 - $63,600 = $2,400 U
Budgeted FMOH ÷ units produced = FMOH per unit
Actual units produced x FMOH = applied FMOH
Actual FMOH - applied FMOH = variance

Conform AI Planned to Produce 6,000 Units but Only Produced