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I want the answer for a question related to production volume variance

  • 1.  I want the answer for a question related to production volume variance

    Posted 09-22-2023 03:21 PM

    Cordell Company uses a standard cost system.  On January 1 of the current year, Cordell budgeted a fixed manufacturing overhead cost of $600,000 and production at 200,000 units.  During the year, the firm produced 190,000 units and incurred fixed manufacturing overhead of $595,000.  The production volume variance for the year was

     

    a.     $5,000 unfavorable.

    b.     $10,000 unfavorable.

    c.     $25,000 unfavorable.

    d.     $30,000 unfavorable.



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    Aakash

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  • 2.  RE: I want the answer for a question related to production volume variance

    Posted 09-22-2023 04:49 PM

    Hi, 

    FOH production variance is = Standard FOH - (Standard application rate * actual units)

    Standard rate =  600,000/200,000 =3

    So, 600,000-(3*190,000) = 30,000 unfavorable

    Thanks



    ------------------------------
    Jigyasa Chawda
    None
    Jersey City NJ
    United States
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    Original Message


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