Harris Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs).The company has provided the following data: The volume variance would be:
A)$2,500 F
B)$1,800 F
C)$1,800 U
D)$1,500 F

Question

Harris Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs).The company has provided the following data:  The volume variance would be:
A)$2,500 F 
B)$1,800 F 
C)$1,800 U 
D)$1,500 F

Quizplus · Accepted Answer

Volume variance = Fixed portion of the predetermined overhead rate F1F1F1S1F1F1F10 (Denominator hours - Standard hours allowed) = $3 F1F1F1S1F1F1F10 (5,000 - 5,500) = $1,500 F

Harris Company Uses a Standard Cost System in Which It