Fixed Overhead Budget and Volume Variance

Four$-$Leaf Clover Company assigns fixed overhead costs to inventory for external reporting purposes by using a predetermined standard overhead rate based on direct labor hours. The standard rate is based on a normal activity level of $24,000$ standard allowed direct labor hours per year. There are five standard allowed hours for each unit of output. Budgeted fixed overhead costs are $$336,000$ per year. During the prior year, the company produced $4,640$ units of output, and actual fixed costs were $$340,000.$

Required

a$.$ Determine the standard fixed overhead rate used to assign fixed costs to inventory.

$Answer $1$

per direct labor hour

b$.$Determine the amount of fixed overhead assigned to inventory during the year.

$Answer $2$

c$.$Determine the fixed overhead budget variance.

Note:$$Do not use a negative sign with your answer.

$Answer $3$

Answer $4$FavorableUnfavorable