The Steff Company has the following flexible budget (in condensed form) for manufacturing overhead: The following data concerning production pertain to last year's operations:
-The volume variance was:
A)$2,000 favorable
B)$2,600 unfavorable
C)$1,000 favorable
D)$800 favorable

Question

The Steff Company has the following flexible budget (in condensed form) for manufacturing overhead:  The following data concerning production pertain to last year's operations:  
-The volume variance was:
A)$2,000 favorable 
B)$2,600 unfavorable 
C)$1,000 favorable 
D)$800 favorable

Quizplus · Accepted Answer

Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $30,000 - ($2 per hour F1F1F1S1F1F1F10 6,850 units F1F1F1S1F1F1F10 2 hours per unit)
= $30,000 - ($2 per hour F1F1F1S1F1F1F10 13,700 hours)
= $30,000 - $27,400 = $2,600 U

The Steff Company Has the Following Flexible Budget (In Condensed