Kuhlman Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below: The company based its original budget on 2,800 machine-hours.The company actually worked 2,730 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,860 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?
A)$623 unfavorable
B)$534 unfavorable
C)$623 favorable
D)$534 favorable

Question

Kuhlman Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below:  The company based its original budget on 2,800 machine-hours.The company actually worked 2,730 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,860 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?
A)$623 unfavorable 
B)$534 unfavorable 
C)$623 favorable 
D)$534 favorable

Quizplus · Accepted Answer

Fixed portion of the predetermined overhead rate = ($2,800 + $7,840 + $14,280) F1F1F1S1F1F1F10 2,800 machine-hours = $8.90 per machine-hour
Volume variance = Fixed portion of the predetermined overhead rate F1F1F1S1F1F1F10 (Denominator hours - Standard hours allowed) = $8.90 F1F1F1S1F1F1F10 (2,800 - 2,860) = $534 F

Kuhlman Corporation Applies Manufacturing Overhead to Products on the Basis