Question: finding the fixed overhead volume variance. Budgeted: Denominator activity (direct labor hours) 17,000 Variable manufacturing overhead cost $57,800 Fixed manufacturing cost $161,500 Manufacturing overhead

finding the fixed overhead volume variance. 

 

Budgeted:

Denominator activity (direct labor hours) 17,000

Variable manufacturing overhead cost $57,800

Fixed manufacturing cost $161,500

Manufacturing overhead 2 hours @ $12.90 per hour

8,840 units were produced

Direct labor hours incurred 18,000 @ 8.20 = $147,600

Variable manufacturing overhead cost incurred $57,400

Fixed manufacturing overhead cost incurred $117,000

The budget variance is 44,500 (Favorable)

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