Use the following information for the next 4 questions.
Hogle Mfg. Co. uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded:
-The fixed overhead production volume variance was
A) $1,000 U
B) $2,500 F
C) $1,500 F
D) $5,000 U

Question

Use the following information for the next 4 questions.
Hogle Mfg. Co. uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded: 
-The fixed overhead production volume variance was
A) $1,000 U 
B) $2,500 F 
C) $1,500 F 
D) $5,000 U

Quizplus · Accepted Answer

The fixed overhead production volume variance is unfavorable when the actual production volume is less than the budgeted production volume. In this case, the actual production volume is 10,000 units and the budgeted production volume is 12,000 units. The fixed overhead cost is $30,000. The fixed overhead production volume variance is $2,500 F.

Use the Following Information for the Next 4 Questions