The following data for February has been provided by Gillard Corporation. The volume variance for February is:
A)$5,580 F
B)$5,580 U
C)$7,440 U
D)$7,440 F

Question

The following data for February has been provided by Gillard Corporation.  The volume variance for February is:
A)$5,580 F 
B)$5,580 U 
C)$7,440 U 
D)$7,440 F

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = $68,820 ÷ 3,700 hours = $18.60 per hour
Volume variance = Fixed component of the predetermined overhead rate x (Denominator hours - Standard hours allowed for the actual output)
= $18.60 per hour × (3,700 hours - 4,000 hours)
= $18.60 per hour × (-300 hours)
= $5,580 F

The Following Data for February Has Been Provided by Gillard