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Use the information in exhibits 24-5 to compute the expected volume variance at 780 units pplying over- Exhibit 24-5 illustrates the head to production at
Use the information in exhibits 24-5 to compute the expected volume variance at 780 units
pplying over- Exhibit 24-5 illustrates the head to production at various output levels of its 20-foot beams. EXHIBIT 24-5 Overhead Applied to Various Volumes Actual Output (in units) 700 600 800 $8,400 $9,800 $11,200 Illustration of the changes es in the volume variance at different levels of output Overhead applied to Work in Process Inventory using a $14 standard rate Budgeted overhead: Fixed Variable ($6 per unit) Total Volume variances-favorable (unfavorable) 4,200 $5,600 3,600 $9,200 $ (800) $5,600 $ 5,600 4,800 $9,800 $10,400 $ -O- $ 800 Notice that at 700 beams per month, Brice's normal production level, there is no vol- ume variance. That is because the budgeted $14 standard cost figure is based upon 700 units being produced each month. As shown earlier in this chapter, this figure includesStep by Step Solution
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