Question

Claymore Corp. has the following information about its standards and production activity for September. T Actual total factory overhead incurred standard factory overhead: $18,020 $ 5.80 er unit produced Variable overhead Fixed overhead ($7,440 / 3,100 estimated units to be produced) 2.40 per unit Actual units produced 1,600 units Multiple Choice $1.300U $1,300F $3,600U $3,600F $4,900U

Answer 1

$3,600U

Step-by-step explanation:

Since the question does not entail what activity needs to be measured, we use the volume variance,

Given,

Fixed overhead = $7,440

Standard units produced = 3,100 units

Actual units produced = 1,600 units

Standard price = $2.40

We know,

Volume (Material Quantity) variance = (Actual quantity - standard quantity) x standard price

Volume Variance = (1,600 - 3,100) x $2.40

Volume Variance = -1,500 x $2.40

Volume Variance = -3,600

It means the volume variance is 3,600 Unfavorable.