Exter Manufacturing experienced the following activity over the last four years. The firm's estimated fixed overhead allocation rate was unchanged over the 4 years at $200 per unit, based on budgeted fixed overhead of $200,000 and 1,000 units of output. The volume variance is closed to the cost of goods sold each year. Exter maintains an absorption costing system. The volume variance for Year 2 is
A) $40,000 Unfavorable
B) $60,000 Favorable
C) $100,000 Unfavorable
D) $20,000 Favorable

Question

Exter Manufacturing experienced the following activity over the last four years.  The firm's estimated fixed overhead allocation rate was unchanged over the 4 years at $200 per unit, based on budgeted fixed overhead of $200,000 and 1,000 units of output. The volume variance is closed to the cost of goods sold each year. Exter maintains an absorption costing system. The volume variance for Year 2 is
A) $40,000 Unfavorable 
B) $60,000 Favorable 
C) $100,000 Unfavorable 
D) $20,000 Favorable

Quizplus · Accepted Answer

The Answer of Exter Manufacturing experienced the following activity over the last four years.  The firm's estimated fixed overhead allocation rate was unchanged over the 4 years at $200 per unit, based on budgeted fixed overhead of $200,000 and 1,000 units of output. The volume variance is closed to the cost of goods sold each year. Exter maintains an absorption costing system. The volume variance for Year 2 is
A) $40,000 Unfavorable 
B) $60,000 Favorable 
C) $100,000 Unfavorable 
D) $20,000 Favorable

Exter Manufacturing Experienced the Following Activity Over the Last Four