Dvorak Company produced 3,500 units of product that required 1.5 standard hours per unit. The standard fixed overhead cost per unit is $2.95 per hour at 5,650 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. $
Dvorak Company produced 3,500 units of product that required 1.5 standard hours per unit. The standard fixed overhead cost per unit is $2.95 per hour at 5,650 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. $
Dvorak Company produced 3,500 units of product that required 1.5 standard hours per unit. The standard fixed overhead cost per unit is $2.95 per hour at 5,650 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. $
Transcribed Image Text:Factory Overhead Volume Variance
Dvorak Company produced 3,500 units of product that required 1.5 standard hours per unit. The standard fixed
overhead cost per unit is $2.95 per hour at 5,650 hours, which is 100% of normal capacity. Determine the
fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign
and an unfavorable variance as a positive number.
$
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
Expert Solution
Fived Overhead Volume Overhead
Fixed overhead volume variance is the amount of fixed overhead actually incurred over and above the budgeted fixed overhead expense. Fixed overhead volume variance can be positive or negative. Positive variance means unfavourable condition where actual expense is more than budgeted. Negative variance means favourable condition where actual expense is less than budgeted. It is calculated by using the formula:
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