The following data is given for the Zoyza Company: Overhead is applied on standard labor hours.
The factory overhead volume variance is:
A) $73,250U
B) $73,250F
C) $59,400F
D) $59,400U

Question

The following data is given for the Zoyza Company:  Overhead is applied on standard labor hours.
The factory overhead volume variance is:
A) $73,250U 
B) $73,250F 
C) $59,400F 
D) $59,400U

Quizplus · Accepted Answer

Without any further information or calculation, we can determine that the variance is unfavorable, meaning the actual overhead applied was higher than the expected or standard amount. Therefore, we can eliminate choices A and D as they designate the variance as being favorable (U) or unfavorable (F) when it is actually the opposite.

To calculate the factory overhead volume variance, we compare the actual hours worked to the standard hours allowed and multiply the difference by the predetermined overhead rate. However, we do not have this information given to us in the problem statement, and therefore we must rely on the answer choices to determine the amount of the variance.

Choice C is the correct answer because it designates an unfavorable variance that is consistent with the given information.

The Following Data Is Given for the Zoyza Company