Rostad Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:

Original Budget Actual Costs

Variable overhead costs:

Supplies $6,500 $6,690

Indirect labor 10,590 9,940

Fixed overhead costs:

Supervision 14,310 14,360

Utilities 13,600 13,650

Factory depreciation 57,230 57,130

Total overhead costs $102,230 $101,770

The company based its original budget on 6,600 machine-hours. The company actually worked 6,560 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,490 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month? (Round your intermediate calculations to 2 decimal places.)

a. $1,323 favorable

b. $1,419 unfavorable

c. $1,419 favorable

d. $1,323 unfavorable

Question

Derick

Business

14 June, 22:16

Rostad Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:

Original Budget Actual Costs

Variable overhead costs:

Supplies $6,500 $6,690

Indirect labor 10,590 9,940

Fixed overhead costs:

Supervision 14,310 14,360

Utilities 13,600 13,650

Factory depreciation 57,230 57,130

Total overhead costs $102,230 $101,770

The company based its original budget on 6,600 machine-hours. The company actually worked 6,560 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,490 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month? (Round your intermediate calculations to 2 decimal places.)

a. $1,323 favorable

b. $1,419 unfavorable

c. $1,419 favorable

d. $1,323 unfavorable

+1

Answers (1)

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Camron Duran · Answer 1

b. $1,419 unfavorable

Explanation:

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

Fixed manufacturing overhead volume variance = Budgeted fixed overhead - standard fixed overhead

First we compute the computing the Budgeted Fixed overhead and Standard fixed overhead

Budgeted Fixed overhead = $14,310 + $13,600 + $57,230

= $85,140

Standard fixed overhead = Standard hours allowed for actual output * Overhead rate

= $6,490 * ($85,140 : $6,600)

= $83,721

Now, we will put it into formula of Fixed manufacturing overhead volume variance =

$85,140 - $83,721

= $1,419 Unfavorable