Question 2 - Standard Costing and Budgeting 2

The standard costs and budget figures relating to production of Playfair's single product are:

Direct material 2 kgs @ $7.25 per kg$14.50

Direct labour of an hour @ $18 per hour$4.50

Factory Overhead $11.50

Standard Cost $30.50

Normal production: 12,000 units

Budgeted fixed overhead: $60,000

Overhead is applied on the basis of standard direct labour hours.

Actual data for the period:

Production: 12,250 units

Material purchased:30,000 kgs @ $7.30 per kg

Material issued to production:24,515 kgs

Direct labour cost: 3,064 hours @ $18.25 per hour

Factory overhead: $139,420 ($62,000 fixed)

Calculate the Fixed overhead volume variance