Peanut\'s Manufacturing produces baseball equipment. The standard cost of produc

Question

Peanut's Manufacturing produces baseball equipment. The standard cost of producing one unit of model XHR is: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.20 Total $10.35 At the start of 2008, Peanut's planned to produce 80,000 units during the year. Annual fixed overhead is $56,000 and the standard for variable overhead is $1.50 per unit. The following information summarizes the results for 2008: Actual production was 75,000 units. Purchased 275,000 ounces of material at a total cost of $343,750. Used 266,250 ounces of material in production. Employees worked 22,000 hours and were paid $275,000. Actual overhead incurred was $175,000. What is the overhead volume variance? $11,000 unfavorable $3,500 unfavorable $10,000 unfavorable $6,500 unfavorable

Explanation / Answer

the Overhead volume variance is $3,500 unfavorable

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