Froelech Company has developed capacity standards. Information is as follows:
$\begin{array}{llr}
\text {Standard cost of the activity capacity acquired } &\$150,000\
\text { Standard cost of the activity capacity used } &100,000\
\text { Standard cost of the actual activity used} &120,000
\end{array}$

-Refer to the figure.What is the volume variance?
A)$20,000 unfavourable
B)$30,000 unfavourable
C)$35,000 unfavourable
D)$50,000 unfavourable

Question

Froelech Company has developed capacity standards. Information is as follows:
$\begin{array}{llr}
  \text {Standard cost of the activity capacity acquired  } &\$150,000\
 \text { Standard cost of the activity capacity used  } &100,000\
 \text {  Standard cost of the actual activity used} &120,000
\end{array}$

-Refer to the figure.What is the volume variance?
A)$20,000 unfavourable
B)$30,000 unfavourable
C)$35,000 unfavourable
D)$50,000 unfavourable

Quizplus · Accepted Answer

The volume variance is calculated as the difference between the standard cost of the activity capacity acquired and the standard cost of the activity capacity used: $150,000 - $100,000 = $50,000 unfavourable.

Froelech Company Has Developed Capacity Standards -Refer to the Figure