(Appendix 11A)A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs)is 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: The fixed manufacturing overhead volume variance for the period is closest to:
A)$2, 720 U
B)$1, 225 F
C)$2, 811 U
D)$3, 945 U

Question

(Appendix 11A)A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs)is 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:  The fixed manufacturing overhead volume variance for the period is closest to:
A)$2, 720 U 
B)$1, 225 F 
C)$2, 811 U 
D)$3, 945 U

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = $40, 425 ÷ 3, 300 hours = $12.25 per hour
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $40, 425 - (3, 078 hours × $12.25 per hour)
= $40, 425 - $37, 705.50
= $2, 719.50 U

(Appendix 11A)A Furniture Manufacturer Uses a Standard Costing System in Which