Use the information below to answer the following question(s).Michelle Inc.uses a level 4-variance analysis of its manufacturing overhead costs, and has the following results for April.A.Budgeted direct labour-hours per unit is used to allocate variable manufacturing overhead.Fixed overhead is allocated on a per unit basis.
b.Budgeted amounts for April are:
C.Actual amounts for April are:

-What is the Michelle Inc.variable production-volume variance?
A)$13,500 unfavourable
B)$6,000 unfavourable
C)$6,000 favourable
D)$0
E)There is never a variable production-volume variance.

Question

Use the information below to answer the following question(s).Michelle Inc.uses a level 4-variance analysis of its manufacturing overhead costs, and has the following results for April.A.Budgeted direct labour-hours per unit is used to allocate variable manufacturing overhead.Fixed overhead is allocated on a per unit basis.
b.Budgeted amounts for April are:
  C.Actual amounts for April are:
 
-What is the Michelle Inc.variable production-volume variance?
A)$13,500 unfavourable 
B)$6,000 unfavourable 
C)$6,000 favourable 
D)$0 
E)There is never a variable production-volume variance.

Quizplus · Accepted Answer

Variable production-volume variance does not exist because it is a concept related to fixed costs, not variable costs. Variable costs change with production levels, so there is no variance related to production volume.

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