Great Inc. manufactures a single product. The following data relates to January 2018: Actual 3,200 units 22,200 hours $9,560 $42,890 Static Budget 3,500 units 20,300 hours $12,180 $45,675 Production Machine hours Variable overhead costs Fixed overhead costs What is the fixed overhead volume variance in January, assuming overhead is applied based on machine hours? a. $3,915 unfavorable b. $3,915 favorable c. $1,130 unfavorable d. $2,184 unfavorable e. $2,785 favorable f. $2,785 unfavorable g. $3,760 favorable h. $2,620 favorable i. None of the above
Great Inc. manufactures a single product. The following data relates to January 2018: Actual 3,200 units 22,200 hours $9,560 $42,890 Static Budget 3,500 units 20,300 hours $12,180 $45,675 Production Machine hours Variable overhead costs Fixed overhead costs What is the fixed overhead volume variance in January, assuming overhead is applied based on machine hours? a. $3,915 unfavorable b. $3,915 favorable c. $1,130 unfavorable d. $2,184 unfavorable e. $2,785 favorable f. $2,785 unfavorable g. $3,760 favorable h. $2,620 favorable i. None of the above
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 12PA: ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc....
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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