On January 1, 2018, XYZ company planned to spend $40,000 for fixed factory overhead during 2018. Also, XYZ planned to work 1,000 hours and planned to produce 100,000 units during 2018. During 2018, XYZ actually spent $43,500 for fixed overhead and actually Produced 110,000 units.

1. Compute the fixed factory overhead volume variance.

2. Is the volume variance favorable or unfavorable?

3. Compute the fixed overhead spending variance.

4. Is the spending variance favorable or unfavorable? 

Answer rating: 100% (QA)

To compute the fixed factory overhead volume variance we use the following formula Fixed Factory Ove... View the full answer