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Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following excerpt from the
Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following excerpt from the standard cost card of its only product:
Standard Hours | Standard Rate | Standard Cost | |||
---|---|---|---|---|---|
Fixed manufacturing overhead | 2 | hours | $ 6.00 | per hour | $ 12.00 |
During the most recent period, the following additional information was available:
The total actual fixed overhead cost was $275,000.
The budgeted amount of fixed overhead cost was $285,000.
46,000 direct labor-hours were actually used to produce 24,130 units.
How much was the fixed overhead volume variance?
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