Question

Rodarta Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $4.70 per machine-hour and the denominator level of activity is 4,900 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $23,190 and the company actually worked 4,830 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 4,850 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month

Answer 1

$329 unfavorable

Step-by-step explanation:

The fixed manufacturing overhead volume variance shows how much the actual production differs from the budgeted production.

Fixed manufacturing overhead volume variance is computed as;

= Actual output at budgeted rate - Budgeted fixed overhead

= (4,830 × $4.70) - ($4.70 × 4,900)

= $22,701 - $23030

= $329 unfavorable

Therefore, the overall fixed manufacturing volume variance for the month is $329 unfavorable