An outdoor barbecue grill 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)$900 F
B)$649 F
C)$180 U
D)$720 F

Question

An outdoor barbecue grill 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)$900 F 
B)$649 F 
C)$180 U 
D)$720 F

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = $25,200 F1F1F1S1F1F1F10 2,800 hours = $9 per DLH
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $25,200 - (2,880 DLHs F1F1F1S1F1F1F10 $9 per DLH)
= $25,200 - $25,920 = $720 F

An Outdoor Barbecue Grill Manufacturer Has a Standard Costing System