Question

Problem:

The following selected information was extracted from the accounting records of Austin, Inc.:

Planned manufacturing activity: 40,000 machine hours

Standard variable-overhead rate per machine hour: $16

Budgeted fixed overhead: $100,000

Variable-overhead spending variance: $92,000 U

Variable-overhead efficiency variance: $102,000 F

Fixed-overhead budget variance: $25,000 U

Total actual overhead: $675,000

Actual fixed overhead: $125,000 Fixed

Actual variable overhead: $550,000 Variable

Actual machine hours worked: 28,625

Standard machine hours allowed: 35,000

Need to find Fixed-overhead volume variance I already know the result is $12,500U I just need to know what work was made to get that number.

If you can please how you get every number I would really appreciate that

Answer 1

Standard Rate Of Fixed Overhead Per Hour = Budgeted Fixed Overhead/ Planed Hours
			=$100000/40000
			=2.5 Per hour
Fixed Overhead Volume Variance = Standard Rate * (Standard machine hours allowed -Planned manufacturing hours)
		=$2.5*(35000 Hours -40000 hours )
		=$12500 (U)
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