Question

Maxwell Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the most recent month:

Machine-hour standard: Two machine hours per unit

Standard fixed overhead rate: $20 per machine hour

Actual production: 15,000 units

Under-applied fixed overhead: $50,000

Fixed overhead budget variance: $30,000 favorable

The budgeted fixed overhead and the fixed overhead volume variance, respectively, are

		$620,000 and $20,000
		$680,000 and -$80,000
		$650,000 and $50,000
		$650,000 and -$50,000
		$620,000 and -$20,000
		$680,000 and $80,000

Answer 1

Applied fixed overhead = Standrad hours for actual prduction * standard rate per hour
	=(15000 units *2 hrs)*$20
	=$600000
Actual fixed overhead= $600000+$50000
	=$650000
Fixed overhead budget variance = Budgeted fixed overhead - actual fixed overhead
30000 (f) =Budgeted fixed overhead -$650000
Budgeted fixed overhead = $650000+30000
	=$680000
Fixed overhead voulume variance = applied fixed overhead - budgeted fixed overhead
=$600000-680000
=-80000
Correct Option : SECOND:$680,000 and -$80,000