Lossing Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: Original Budget Actual Costs Variable overhead costs: Supplies $ 8,000 $ 8,190 Indirect labor 10,740 10,090 Fixed overhead costs: Supervision 15,810 14,510 Utilities 15,100 15,150 Factory depreciation 60,290 61,540 Total overhead cost $ 109,940 $ 109,480 The company based its original budget on 8,000 machine-hours. The company actually worked 7,960 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 7,890 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month

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Answer:

Fixed manufacturing Volume variance 1496 Unfavorable

Budgeted Fixed Manufacturing

overhead rate*(Denominator hour-

Standard hours allowed)

 

13.6*(6000-5890)

 

Budgeted Fixed Manufacturing

overhead rate                                        13.60

 

Budgeted Fixed Manufacturing/No of

Budgeted variance

 

(13710+13000+54890)/6000

 

Ans b $1496 unfavorable

   

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