Question

Factory Overhead Volume Variance

Bellingham Company produced 1,900 units of product that required 1.5 standard direct labor hours per unit. The standard fixed overhead cost per unit is $2.10 per direct labor hour at 3,150 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
$ Unfavorable

Answer 1

• Correct Answer = $ 630 Unfavourable

Fixed Overhead Production Volume Variance
(	Standard Fixed Overhead or Fixed Overhead absorbed = 1900 units x 1.5 hours x $ 2.10	-	Budgeted Fixed Overhead = 3150 hours x $ 2.10	)
(	$                        5,985.00	-	$              6,615.00	)
	-630
	Variance		630			Unfavourable-U