The Dillon Corporation makes and sells a single product. Overhead costs are applied on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit. The Dillon Corporation had the following budgeted and actual data for March:

-The fixed manufacturing overhead volume variance for March is:
A)$7,750 F
B)$7,750 U
C)$1,550 F
D)$3,900 U

Question

The Dillon Corporation makes and sells a single product. Overhead costs are applied on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit. The Dillon Corporation had the following budgeted and actual data for March:

-The fixed manufacturing overhead volume variance for March is:

-The fixed manufacturing overhead volume variance for March is:
A)$7,750 F 
B)$7,750 U 
C)$1,550 F 
D)$3,900 U

Quizplus · Accepted Answer

The fixed manufacturing overhead volume variance is calculated as the difference between the budgeted fixed manufacturing overhead and the actual fixed manufacturing overhead. In this case, the budgeted fixed manufacturing overhead is $10,000 and the actual fixed manufacturing overhead is $2,250. Therefore, the fixed manufacturing overhead volume variance is $10,000 - $2,250 = $7,750 F.

The Dillon Corporation Makes and Sells a Single Product