DBC Company applies fixed overhead at $8 per machine hour.During the year actual fixed overhead amounted to $75 000 and the standard machine hours allowed for units produced was 11 000.Budgeted fixed overhead was $80 000.Which of the following is the best description of the items used to calculate the volume variance?
Budgeted FOH
Applied FOH
Actual FOH
A) $80 000
$88 000
Ignore
B) $88 000
$88 000
Ignore
C) $88 000
$75 000
Ignore
D) ignore
$88 000
$75 000

Question

Quizplus · Accepted Answer

The volume variance is calculated as the difference between budgeted fixed overhead ($80,000) and applied fixed overhead ($88,000, which is $8 per machine hour times 11,000 machine hours). Actual fixed overhead is not used in this calculation.

DBC Company Applies Fixed Overhead at $8 Per Machine Hour