Question

# Greyson Company produced 8,300 units of their product that required 4.25 standard hours per unit. The...

Greyson Company produced 8,300 units of their product that required 4.25 standard hours per unit. The standard fixed overhead cost per unit is \$1.80 per hour at 27,000 hours, which is 100% of normal capacity. The Fixed Factory Overhead Volume Variance is equal to: a) \$14,895 Unfavorable b) -\$14,895 Favorable c) \$8,275 Unfavorable d) -\$8,275 Favorable

Fixed Factory Overhead Volume Variance is the difference between standard and absorbed fixed overheads.

Actual units produced = 8300 units

Time taken in hours per unit = 4.25 hours

Therefore actual total hours required for production = 8300 x 4.25 = 35,275 hours

Standard hours required for production at normal capacity (given) = 27,000 hours

Standard fixed overhead cost per unit (given) = \$ 1.80 per hour

= (35,275 x 1.80) - (27,000 x 1.80)

= \$ 14,895 Unfavorable

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