Tantanka Manufacturing Corporation uses a standard cost system with machine-hours as the activity base for overhead. The following information relates to production for last year: The standard machine-hours allowed for actual output during the year were 7,600. The actual machine-hours incurred were 7,500.
What was Tantanka's fixed manufacturing overhead volume variance?
A) $5,700 Unfavorable
B) $14,440 Unfavorable
C) $28,500 Favorable
D) $34,200 Unfavorable

Question

Tantanka Manufacturing Corporation uses a standard cost system with machine-hours as the activity base for overhead. The following information relates to production for last year:  The standard machine-hours allowed for actual output during the year were 7,600. The actual machine-hours incurred were 7,500.
What was Tantanka's fixed manufacturing overhead volume variance?
A) $5,700 Unfavorable 
B) $14,440 Unfavorable 
C) $28,500 Favorable 
D) $34,200 Unfavorable

Quizplus · Accepted Answer

Volume variance = Budgeted fixed overhead − Fixed overhead applied to work in process
= $684,000 − $649,800
= $34,200 U

Tantanka Manufacturing Corporation Uses a Standard Cost System with Machine-Hours