Chapter 10.A, Problem 4E

EXERCISE 10A-4 Fixed Overhead Variances LO10-4
Selected operating information on three different companies for a recent year is gh en below:

Company

	A	B	C
Full-capacity machine-hours	10,000	18,000	20,000
Budgeted machine-hours*	9.000	17,000	20,000
Actual machine-hours	9.000	17,800	19,000
Standard machine-hours allowed for actual production	9,500	16,000	20,000

‘Denominator activity for computing the predetermined overhead rate.

Required:

For each company, state whether the company would have a favorable or unfavorable volume variance and why.