A furniture manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period:
-What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?
A)$2,486 U
B)$1,511 U
C)$975 U
D)$2,653 U

Question

A furniture manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: 
-What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?
A)$2,486 U 
B)$1,511 U 
C)$975 U 
D)$2,653 U

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = $66,300 F1F1F1S1F1F1F10 6,800 hours = $9.75 per hour
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $66,300 - (6,545 hours F1F1F1S1F1F1F10 $9.75 per hour)
= $66,300 - $63,814 = $2,486 U

A Furniture Manufacturer Has a Standard Costing System Based on Standard