Question

Acme Company’s production budget for August is 17,900 units and includes the following component unit costs:...

Acme Company’s production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard fixed overhead application rate per unit consists of $2.4 per machine hour and each unit is allowed a standard of 1 hour of machine time.

Required:

Calculate the fixed overhead budget variance and the fixed overhead volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

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