Underfoot Products uses standard costing.The following information about overhead was generated during May:
-Using the above information provided for Underfoot Products,compute the fixed overhead volume variance.
A)$5,000 (
B)$10,000 (
C)$10,000 (
D)$15,000 (

Question

Underfoot Products uses standard costing.The following information about overhead was generated during May:  
-Using the above information provided for Underfoot Products,compute the fixed overhead volume variance.
A)$5,000 (
B)$10,000 (
C)$10,000 (
D)$15,000 (

Quizplus · Accepted Answer

The fixed overhead volume variance is calculated as Actual Fixed Overhead - Budgeted Fixed Overhead at standard volume. Using the given information:
Actual Fixed Overhead = $200,000
Budgeted Fixed Overhead at standard volume = $190,000 (i.e. 10,000 hours at $19 per hour)
Therefore, Fixed Overhead Volume Variance = $200,000 - $190,000 = $10,000 (U).

Underfoot Products Uses Standard Costing