Question

Actual total factory overhead incurred $ 28,875 Standard factory overhead: Variable overhead $ 2.10 per unit produced Fixed overhead ($11,200/11,200 predicted units to be produced) $ 1.00 per unit Predicted units to produce 11,200 units Actual units produced 10,200 units Compute the overhead volume variance for November and classify it as favorable, unfavorable or no variance.

Answer 1

Overhead volume variance= $1000 unfavorable

Step-by-step explanation:

Giving the following information:

Actual total factory overhead incurred $ 28,875 Standard factory overhead: Variable overhead $ 2.10 per unit produced Fixed overhead ($11,200/11,200 predicted units to be produced) $ 1.00 per unit Predicted units to produce 11,200 units Actual units produced 10,200 units.

Overhead volume variance= fixed overhead rate*(Normal capacity - standard capacity)

Fixed overhead rate= $1 per unit

Standard capacity= 11,200 units

Normal capacity= 10,200

Overhead volume variance= 1*(10,200 - 11,200)= $1000 unfavorable