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3 April, 20:28

Radon Corporation manufactured 38 comma 10038,100 grooming kits for horses during March. The following fixed overhead data pertain to March: Actual Static Budget Production 38 comma 10038,100 units 35 comma 00035,000 units Machine-hours 7 comma 1007,100 hours 7 comma 0007,000 hours Fixed overhead costs for March $ 149 comma 200$149,200 $ 140 comma 000$140,000 What is the fixed overhead production-volume variance? A. $ 9 comma 200$9,200 favorable B. $ 12 comma 400$12,400 favorable C. $ 9 comma 200$9,200 unfavorable D. $ 12 comma 400$12,400 unfavorable

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  1. 3 April, 20:56
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    Fixed overhead variance $12400 favorable

    Explanation:

    Predetermined overhead absorption rate =

    Estimated Fixed overhead / Estimated number of unit

    = $140,000 / 35,000 units

    = $4 per unit

    Fixed overhand volume variance

    units

    Budgeted production volume 35,000

    Actual production volume 38,100

    Variance in units 3,100 favorable

    Standard fixed overhead rate * $4

    Fixed overhead variance $12400 favorable

    Fixed overhead variance $12400 favorable
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