Question
The following data is given for the Bahia Company: Budgeted production 1,000 units Actual production 980 units Materials: Standard price per pound $2.00 Standard pounds
The following data is given for the Bahia Company:
Budgeted production | 1,000 units |
Actual production | 980 units |
Materials: |
|
Standard price per pound | $2.00 |
Standard pounds per completed unit | 12 |
Actual pounds purchased and used in production | 11,800 |
Actual price paid for materials | $23,000 |
Labor: |
|
Standard hourly labor rate | $14 per hour |
Standard hours allowed per completed unit | 4.5 |
Actual labor hours worked | 4,560 |
Actual total labor costs | $62,928 |
Overhead: |
|
Actual and budgeted fixed overhead | $27,000 |
Standard variable overhead rate | $3.50 per standard labor hour |
Actual variable overhead costs | $15,500 |
Overhead is applied on standard labor hours. Question: The factory overhead volume variance is
540 unfavorable
Could you explain why?
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