Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units. In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units. What is Shamrock's fixed overhead volume variance for July?

Question

Quizplus · Accepted Answer

Fixed overhead volume variance can be calculated as:
Fixed Overhead Volume Variance = Budgeted fixed overhead - (Actual production * Budgeted fixed overhead per unit)

Budgeted fixed overhead = $2.75 per unit * 1,350 units = $3,712.50

Fixed Overhead Volume Variance = $3,712.50 - (1,300 units * $2.75 per unit) = $3,712.50 - $3,575 = $137.50 unfavorable.

Therefore, the answer is D, $137.50 unfavorable.

Shamrock Manufacturing Budgeted Fixed Overhead Costs of $2