Answer:
$90
Explanation:
Factory overhead volume variances refers to difference between the budgeted fixed overhead at 100% of normal capacity, and the standard fixedd overheads for the actual units produced.
The factory overhead voume variance can be calculated as follows :
Fixed factory overhead volume variance = (Standard hours for
the 100% of normal
capacity - Standard
hours for the actual
unit produced)x(fixed
factory overhead rate)
To solve the question we have,
Unit produced 8,900 units of a product in 3.25 standard hours per unit
= 8,900 x 3.25
=28925 hours
cost per unit = $1.20 per hour
hours at 100% normal capaity = 29,000 hours
fixed factory overhead volume variance = ?
Formula:
Fixed factory overhead volume variance = (Standard hours for
the 100% of normal
capacity - Standard
hours for the actual
unit produced)x(fixed
factory overhead rate)
Solution:
Fixed factory overhead volume variance = (29,000 hours -
28,925 hours) x $1.20
= 75 x $1.20
= $90
