Approach Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 14,800 Actual ﬁxed overhead incurred: $791,000 Standard ﬁxed overhead rate: $13 per hour Budgeted ﬁxed overhead: $780,000 Planned level of machine-hour activity: 60,000 If Approach estimates four hours to manufacture a completed unit, the company's ﬁxed-overhead volume variance would be:
A)$10,400 negative.
B)$10,400 positive.
C)$11,000 negative.
D)$11,000 positive.
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

The Answer of Approach Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 14,800 Actual ﬁxed overhead incurred: $791,000 Standard ﬁxed overhead rate: $13 per hour Budgeted ﬁxed overhead: $780,000 Planned level of machine-hour activity: 60,000 If Approach estimates four hours to manufacture a completed unit, the company's ﬁxed-overhead volume variance would be:
A)$10,400 negative.
B)$10,400 positive.
C)$11,000 negative.
D)$11,000 positive.
E)None of the answers is correct.

Approach Company, Which Applies Overhead to Production on the Basis