Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

-
Calculate the fixed overhead volume variance.
A) $32,000 U
B) $20,000 F
C) $22,000 F
D) $4,000 U
E) None of these.

Question

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

-
Calculate the fixed overhead volume variance.

- 
Calculate the fixed overhead volume variance.
A) $32,000 U 
B) $20,000 F 
C) $22,000 F 
D) $4,000 U 
E) None of these.

Quizplus · Accepted Answer

Volume variance = BFOH - SFOR × SH = $994,000 - $973,080 = $20,920 U

Kris Company Calculates Its Predetermined Rates Using Practical Volume, Which