Cornerstone Exercise 9.8 (Algorithmic) Calculating the Fixed Overhead Spending and Volume Variances

Standish Company manufactures consumer products and provided the following information for the month of February:

Units produced	131,500
Standard direct labor hours per unit	0.2
Standard fixed overhead rate (per direct labor hour)	$2.30
Budgeted fixed overhead	$64,700
Actual fixed overhead costs	$68,300
Actual hours worked	26,650

Required:

1. Calculate the fixed overhead spending variance using the formula approach. $ - Select your answer -FavorableUnfavorableItem 2

2. Calculate the volume variance using the formula approach. $ - Select your answer -FavorableUnfavorableItem 4

3. What if 127,400 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below.

Fixed Overhead Spending Variance	$	- Select your answer -FavorableUnfavorableItem 6
Volume Variance	$	- Select your answer -FavorableUnfavorable Item 8