Sagnik B.

asked • 01/03/15

Fixed Manufacturing Overhead Volume Variance Accounting

A manufacturer of sound equipment uses a standard costing system with fixed manufacturing overhead applied based on Machine Hours. According to their standards, each unit requires 2 Machine Hours.
For the most recent period :
Budgeted Units : 1,400
Actual Units : 1,586
Actual Machine Hours : 3,400
Fixed Manufacturing Overhead -> budget : 40,650 actual : 41,600
Question : The Fixed Manufacturing Overhead Volume Variance for the period was closest to :
A) 4450.64 unfavorable B) 2,725.94 unfavorable C) 5400.64 favorable D) 8,710.71 favorable E) none of above
Answer was C) but I don't get how, please show help with steps.

1 Expert Answer


Sagnik B.

You are really helping me along nicely here, I asked some other variance questions, if you can look at them when you have time.
Hope your new year is off to a great start. Will keep you updated on my dad's health as well.


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