Easel Manufacturing budgeted fixed overhead costs of $2.50 per unit at an anticipated production level of 1400 units. In July Easel incurred actual fixed overhead costs of $3700 and actually produced 1100 units. What is Easel's fixed overhead volume variance in July?
A)$200.00 favorable
B)$200.00 unfavorable
C)$750.00 favorable
D)$750.00 unfavorable

Question

Quizplus · Accepted Answer

Fixed overhead volume variance = (Budgeted Fixed Overhead - Actual Fixed Overhead) x (Actual Production - Budgeted Production)
= ($2.50 x 1400 - $3700) x (1100 - 1400)
= (-$250) x (-300)
= $750 unfavorable variance.

Easel Manufacturing Budgeted Fixed Overhead Costs of $2