Adizero Ltd uses a standard cost system. Indirect costs were budgeted at $200,000 plus $15 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were: $\begin{array}{lr}
\text { Standard direct labour hours } & 9,000 \
\text { Actual direct labour hours } & 10,000 \
\text { Fixed overhead } & \$ 190,000 \
\text { Variable overhead } & \$ 185,000
\end{array}$
The fixed overhead production volume variance was:
A) $20,000 F
B) $20,000 U
C) $10,000 U
D) $10,000 F

Question

Adizero Ltd uses a standard cost system. Indirect costs were budgeted at $200,000 plus $15 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were: $\begin{array}{lr}
\text { Standard direct labour hours } & 9,000 \
\text { Actual direct labour hours } & 10,000 \
\text { Fixed overhead } & \$ 190,000 \
\text { Variable overhead } & \$ 185,000
\end{array}$ 
The fixed overhead production volume variance was:
A) $20,000 F
B) $20,000 U
C) $10,000 U
D) $10,000 F

Quizplus · Accepted Answer

Fixed overhead production volume variance = (Standard fixed overhead - Actual fixed overhead)= ($200,000 - $190,000)= $20,000 U

Adizero Ltd Uses a Standard Cost System The Fixed Overhead Production Volume Variance Was: A) $20,000 F

Adizero Ltd Uses a Standard Cost System The Fixed Overhead Production Volume Variance Was:
A) $20,000 F