Jupiter Corporation incurred fixed manufacturing costs of $19,000 during 2017. Other information for 2017 includes:
The budgeted denominator level is 2,300 units.
Units produced total 2,600 units.
Units sold total 1,700 units.
Variable cost per unit is $6
Beginning inventory is zero.
The fixed manufacturing cost rate is based on the budgeted denominator level.
Under absorption costing, the production-volume variance is ________. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A) $4,278
B) $2,300
C) $2,478
D) 0

Question

Quizplus · Accepted Answer

The production-volume variance is the difference between the budgeted fixed manufacturing cost and the actual fixed manufacturing cost. The budgeted fixed manufacturing cost is based on the budgeted denominator level, which is 2,300 units. The actual fixed manufacturing cost is $19,000. The production-volume variance is $19,000 - ($19,000 x 2,600 units / 2,300 units) = $4,278.

Jupiter Corporation Incurred Fixed Manufacturing Costs of $19,000 During 2017