A company uses a standard costing system and applies overhead to production based on direct labor-hours. It provided the following information for its most recent year. Budgeted fixed overhead cost for the year Actual fixed overhead cost for the year $300,000 $276,000 60,000 56,000 56,500 Budgeted direct labor-hours (denominator hours) Actual direct labor-hours Standard direct labor-hours allowed for actual output What is the fixed overhead volume variance?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company uses a standard costing system and applies overhead to production based on direct labor-hours. It provided the following information for its most recent year:

- **Budgeted fixed overhead cost for the year:** $300,000
- **Actual fixed overhead cost for the year:** $276,000
- **Budgeted direct labor-hours (denominator hours):** 60,000
- **Actual direct labor-hours:** 56,000
- **Standard direct labor-hours allowed for actual output:** 56,500

**What is the fixed overhead volume variance?**

Multiple Choice:
- $20,000 F
- $17,500 U
- $20,000 U

(Note: "F" denotes favorable variance, and "U" denotes unfavorable variance.)
Transcribed Image Text:A company uses a standard costing system and applies overhead to production based on direct labor-hours. It provided the following information for its most recent year: - **Budgeted fixed overhead cost for the year:** $300,000 - **Actual fixed overhead cost for the year:** $276,000 - **Budgeted direct labor-hours (denominator hours):** 60,000 - **Actual direct labor-hours:** 56,000 - **Standard direct labor-hours allowed for actual output:** 56,500 **What is the fixed overhead volume variance?** Multiple Choice: - $20,000 F - $17,500 U - $20,000 U (Note: "F" denotes favorable variance, and "U" denotes unfavorable variance.)
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