Question

St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000, and actual variable overhead was $170,000. Actual production was 11,700 units. The fixed factory overhead volume variance is

Answer 1

$9,000 unfavorable

Step-by-step explanation:

The computation of the total fixed overhead variance is shown below:

= Actual fixed overhead costs - Budgeted fixed overhead

where,

Budgeted fixed overhead is $360,000

And, the Actual fixed overhead cost is computed below:

= Actual fixed overhead × Actual production ÷ budgeted production

= $360,000 × 11,700 units ÷ 12,000 units

= $351,000

Now put these values to the above formula

So, the value would equal to

= $351,000 - $360,000

= $9,000 unfavorable