Question

Dixon Company produced 6,000 units of product that required 1.5 standard hours per unit. The standard fixed overhead cost per unit is $0.50 per hour at 10,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. a.$2,000 unfavorable b.$2,000 favorable c.$500 unfavorable d.$500 favorable

Answer 1

the fixed factory overhead volume variance is $500 unfavorable

Step-by-step explanation:

The computation of the fixed factory overhead volume variance is shown below:

Fixed factory overhead volume variance

= (6,000 × 1.5 - 10,000) × $0.50 per hour

= (9000 - 10000) × $0.50

= $500 Unfavorable

Hence, the fixed factory overhead volume variance is $500 unfavorable

Therefore the last option is c