Question

The following information applies to the questions displayed below.
AirPro Corp. reports the following for November.
Actual total factory overhead incurred $28,175
Standard factory overhead:
Variable overhead 3.10 per unit produced
Fixed overhead
($12,000/12,000 predicted units to be produced) $ 1.00 per unit
Predicted units to produce 12,000 units
Actual units produced 9,800 units
Required:
1. Compute the overhead volume variance for November and classify it as favorable or unfavorable.

Answer 1

Answer:

Explanation:

Answer:

It is $2,205 (Favorable)

Explanation:

Standard Fixed Overhead Rate (SFOR)= $ 1.00

Applied Fixed Overhead(AFO)  = Standard Fixed Overhead Rate × Standard Hours Allowed  per unit

    AFO per unit    = $ 1.00 * 3.10

                              =$ 3.10

Fixed Overhead Volume Variance(FOVV) = Applied Fixed Overhead(AFO) – Budgeted Fixed Overhead(BFO).

FOVV = ( $ 3.10 * 9,800) -$28,175

         =$2,205 (Favorable)