Trecroci Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The company bases its predetermined overhead rate on 2,500 machine-hours.The company's total budgeted fixed manufacturing overhead is $5,750.In the most recent month,the total actual fixed manufacturing overhead was $6,030.The company actually worked 2,600 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,490 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?
A)$230 favorable
B)$280 unfavorable
C)$23 unfavorable
D)$230 unfavorable

Question

Quizplus · Accepted Answer

Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost F1F1F1S1F1F1F10 Estimated total amount of the allocation base = $5,750 F1F1F1S1F1F1F10 2,500 machine-hours = $2.30 per machine-hour
Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
= $5,750 - (2,490 machine-hours F1F1F1S1F1F1F10 $2.30 per machine-hour)
= $5,750 - $5,727 = $23 U

Trecroci Corporation Applies Manufacturing Overhead to Products on the Basis