Question

Radon Corporation manufactured 38 comma 10038,100 grooming kits for horses during March. The following fixed overhead data pertain to​ March: Actual Static Budget Production 38 comma 10038,100 units 35 comma 00035,000 units ​Machine-hours 7 comma 1007,100 hours 7 comma 0007,000 hours Fixed overhead costs for March $ 149 comma 200$149,200 $ 140 comma 000$140,000 What is the fixed overhead​ production-volume variance? A. $ 9 comma 200$9,200 favorable B. $ 12 comma 400$12,400 favorable C. $ 9 comma 200$9,200 unfavorable D. $ 12 comma 400$12,400 unfavorable

Answer 1

Answer:

Fixed overhead variance  $12400  favorable

Explanation:

Predetermined overhead absorption rate =

Estimated Fixed overhead/ Estimated number of unit

= $140,000/ 35,000 units

= $4 per unit

Fixed overhand volume variance

                                                                                        units

Budgeted production volume                                     35,000

Actual production volume                                          38,100

Variance in units                                                          3,100 favorable

Standard fixed overhead rate                                   × $4

Fixed overhead variance                                            $12400  favorable

Fixed overhead variance  $12400  favorable