Rostad Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:

Original Budget Actual Costs
Variable overhead costs:
Supplies $6,500 $6,690
Indirect labor 10,590 9,940

Fixed overhead costs:
Supervision 14,310 14,360
Utilities 13,600 13,650
Factory depreciation 57,230 57,130
Total overhead costs $102,230 $101,770

The company based its original budget on 6,600 machine-hours. The company actually worked 6,560 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,490 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month? (Round your intermediate calculations to 2 decimal places.)

a. $1,323 favorable
b. $1,419 unfavorable
c. $1,419 favorable
d. $1,323 unfavorable

b. $1,419 unfavorable

Explanation:

The computation of the fixed manufacturing overhead volume variance is shown below:-

Fixed manufacturing overhead volume variance = Budgeted fixed overhead - standard fixed overhead

First we compute the computing the Budgeted Fixed overhead and Standard fixed overhead

Budgeted Fixed overhead = $14,310 + $13,600 + $57,230

= $85,140

Standard fixed overhead = Standard hours allowed for actual output × Overhead rate

= $6,490 × ($85,140 ÷ $6,600)

= $83,721

Now, we will put it into formula of Fixed manufacturing overhead volume variance =

$85,140 - $83,721

= $1,419 Unfavorable

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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