Factory Overhead Volume Variance Bellingham Company produced 4,600 units of product that required 4 standard direct labor hours per unit. The standard fixed overhead cost per unit is $2.30 per direct labor hour at 16,700 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.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Introduction:
The difference between the fixed overhead that was budgeted to be applied to produced goods and the amount that was actually applied to produced goods based on production volume is known as the fixed overhead volume variance. This variance is looked at as part of the cost accounting period-end reporting package.
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