Hoops Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $1.30 per machine-hour and the denominator level of activity is 3,700 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $4,450 and the company actually worked 4,000 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,880 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?
A) $390 favorable
B) $234 favorable
C) $156 unfavorable
D) $390 unfavorable

Question

Quizplus · Accepted Answer

The Answer of Hoops Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $1.30 per machine-hour and the denominator level of activity is 3,700 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $4,450 and the company actually worked 4,000 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,880 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?
A) $390 favorable
B) $234 favorable
C) $156 unfavorable
D) $390 unfavorable

Hoops Corporation Applies Manufacturing Overhead to Products on the Basis