Question

Wangerin Corporation applies overhead to products based on machine-hours. The budgeted fixed overhead costs are $240,810 based on a normal level of activity of 6.900 machine-hours. In April, the actual fixed overhead costs were $245,640 and the standard machine-hours allowed for the actual output were 6.950 machine-hours. The volume variance is type your answer______

Answer 1

The volume variance is $1,750.

Step-by-step explanation:

The volume variance is a measure of the difference between the budgeted fixed overhead costs and the actual fixed overhead costs, based on the standard machine-hours allowed for the actual output. In this case, the budgeted fixed overhead costs are $240,810 based on a normal level of activity of 6,900 machine-hours. The actual fixed overhead costs were $245,640 and the standard machine-hours allowed for the actual output were 6,950 machine-hours.

To calculate the volume variance, we can use the following formula:

Volume Variance = (Actual Machine-Hours - Standard Machine-Hours) * Budgeted Fixed Overhead Rate

Substituting the given values:

Volume Variance = (6,950 - 6,900) * ($240,810 / 6,900)

Simplifying,

Volume Variance = 50 * $35 = $1,750