The standard costs and actual costs for factory overhead for the manufacture of 3,000 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) Variable overhead 3 hours per unit @ $0.78 per hour 3 hours per unit @ $2.00 per hour Actual Costs Total variable cost, $18,000 Total fixed cost, $7,900 The amount of the fixed factory overhead volume variance is O a. $0 O b. $624 favorable O c. $780 unfavorable O d. $624 unfavorable

The standard costs and actual costs for factory overhead for the manufacture of 3,000 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) Variable overhead 3 hours per unit @ $0.78 per hour 3 hours per unit @ $2.00 per hour Actual Costs Total variable cost, $18,000 Total fixed cost, $7,900 The amount of the fixed factory overhead volume variance is O a. $0 O b. $624 favorable O c. $780 unfavorable O d. $624 unfavorable

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Description: The standard costs and actual costs for factory overhead for the manufacture of 3,000 units of actual production are as follows:Standard CostsFixed overhead (based on 10,000 hours)Variable overhead3 hours per unit @ $0.78 per hour3 hours per unit @

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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.

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The standard costs and actual costs for factory overhead for the manufacture of 3,000 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
Variable overhead
3 hours per unit @ $0.78 per hour
3 hours per unit @ $2.00 per hour
a. $0
b. $624 favorable
O c. $780 unfavorable
O d. $624 unfavorable
Actual Costs
Total variable cost, $18,000
Total fixed cost, $7,900
The amount of the fixed factory overhead volume variance is

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