Reference: 21_07
Montaigne Corp. has the following information about its standards and production activity in November:
$\begin{array}{llr}
\text { Actual total factory overhead incurred } &\$28,175\
\text { Standard factory overhead:} &\
\text { Variable overhead } &\text { $ \$ 3.10 $ per unit}\\
& \text { produced}\
\text { Fixed overhead} &\
\text { $ (\$ 12,000 / 6,000 $ estimated units to be produced)} &\text { $ \$ 2 $ per unit }\
\text { Actual units produced } &\text { 4,800 units}\
\end{array}$

-The volume variance is:
A) $1,295U
B) $1,295F
C) $2,400U
D) $2,400F
E) $3,695U

Question

Reference: 21_07
Montaigne Corp. has the following information about its standards and production activity in November:
 $\begin{array}{llr}
  \text { Actual total factory overhead incurred  } &\$28,175\
 \text {  Standard factory overhead:} &\
 \text { Variable overhead } &\text {  $ \$ 3.10 $ per unit}\\
& \text {   produced}\
 \text {  Fixed overhead} &\
 \text {  $ (\$ 12,000 / 6,000 $ estimated units to be produced)} &\text { $ \$ 2 $ per unit }\  
 \text { Actual units produced } &\text { 4,800 units}\
\end{array}$

-The volume variance is:
A) $1,295U
B) $1,295F
C) $2,400U
D) $2,400F
E) $3,695U

Quizplus · Accepted Answer

The volume variance is calculated as the difference between the budgeted fixed overhead for the actual production level and the budgeted fixed overhead for the expected production level. The expected production level is 6,000 units, and the actual production level is 4,800 units. The fixed overhead rate is $2 per unit. Thus, the volume variance is (6,000 - 4,800) units * $2 = $2,400 unfavorable (U).

Reference: 21_07 Montaigne Corp -The Volume Variance Is: A) $1,295U B) $1,295F C) $2,400U

Reference: 21_07
Montaigne Corp -The Volume Variance Is:
A) $1,295U
B) $1,295F
C) $2,400U