Question
Everjoice Company makes clocks. The budgeted fixed overhead costs for 2012 totaled $720,000. The company uses direct labor hours to allocated fixed overhead and it
Everjoice Company makes clocks. The budgeted fixed overhead costs for 2012 totaled $720,000. The company uses direct labor hours to allocated fixed overhead and it takes 0.5 direct labor hours per clock. The budgeted quantity of clocks (output) planned for the year was 480,000 units. During the year, 504,000 clocks were produced and $780,000 was spent on fixed overhead. A. What is the fixed overhead rate (FOH rate) for 2012 based on direct labor hours?
B. The production volume variance for 2012 is (include the amount and write out favorable or unfavorable):
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