Forward Venture Company, which uses a standard cost system, budgeted $600,000 of ﬁxed overhead when 40,000 machine hours were anticipated.Other data for the period were: Actual units produced: 10,000 Standard production time per unit: 3.9 machine hours Fixed overhead incurred: $620,000 Actual machine hours worked: 42,000 Forward Venture Company's ﬁxed-overhead volume variance is:
A)$10,000 negative.
B)$15,000 negative.
C)$15,000 positive.
D)$20,000 negative.
E)$20,000 positive.

Question

Quizplus · Accepted Answer

Fixed overhead volume variance = (Standard fixed overhead rate x (Standard machine hours - Actual machine hours))= ($15 x (40,000 - 42,000))= $15,000 favorable

Forward Venture Company, Which Uses a Standard Cost System, Budgeted