Figure 9-3 Alumni Manufacturing Company has the following information pertaining to a normal monthly activity of 10,000 units:
Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.
Standard factory overhead rates per direct labor hour are:
Refer to Figure 9-3. What is the fixed overhead volume variance for Alumni?
A) $10,000 (
B) $-0-
C) $4,000 (
D) $6,000 (

Question

Figure 9-3 Alumni Manufacturing Company has the following information pertaining to a normal monthly activity of 10,000 units:
Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.
Standard factory overhead rates per direct labor hour are:
 Refer to Figure 9-3. What is the fixed overhead volume variance for Alumni?
A) $10,000 (
B) $-0- 
C) $4,000 (
D) $6,000 (

Quizplus · Accepted Answer

The fixed overhead volume variance is calculated as (Actual Production - Normal Production) x Standard Fixed Overhead Rate per unit. Here, the actual production is 10,000 units, which is equal to the normal production. Therefore, the fixed overhead volume variance is $-0- (zero). Option B is incorrect as it does not take into account the calculation of the fixed overhead volume variance. Option A and C are incorrect as they suggest a positive variance (F for favorable) without considering the actual production being equal to normal production. The correct choice is D, which indicates an unfavorable variance due to actual production being less than the normal production.

Figure 9-3 Alumni Manufacturing Company Has the Following Information Pertaining