Question

Information on Carney Company's fixed overhead costs follows: Overhead applied $ 361,200 Actual overhead 387,300 Budgeted overhead 372,000 Required: What are the fixed overhead price and production volume variances? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Answer 1

The Fixed overhead price is "U" (unfavorable) and the The fixed overhead production volume is "U" (unfavorable)

Step-by-step explanation:

Solution

Given that:

Fixed overhead price Variance is computed as:

Fixed overhead price Variance = Actual - Budgeted

= 387,300 - 372,000

= 15,300 U

Thus,

The Fixed overhead production volume variance is computed as:

Fixed overhead production volume variance = = Budgeted - applied

= 372,000 - 361,200

= 10,800 U