(Appendix 11A)The following data for February has been provided by Gillard Corporation. The volume variance for February is:
A)$5, 580 F
B)$5, 580 U
C)$7, 440 U
D)$7, 440 F

Question

(Appendix 11A)The following data for February has been provided by Gillard Corporation.  The volume variance for February is:
A)$5, 580 F 
B)$5, 580 U 
C)$7, 440 U 
D)$7, 440 F

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = $68, 820 ÷ 3, 700 hours = $18.60 per hour
Volume variance = Fixed component of the predetermined overhead rate × (Denominator hours - Standard hours allowed for the actual output)
= $18.60 per hour × (3, 700 hours - 4, 000 hours)
= $18.60 per hour × (-300 hours)
= $5, 580 F

(Appendix 11A)The Following Data for February Has Been Provided by Gillard