Diekow Productions manufactured and sold 1,000 products at $11,000 each during t
ID: 2378351 • Letter: D
Question
Diekow Productions manufactured and sold 1,000 products at $11,000 each during the past year. At the beginning of the year, production had been set at 1,200 products; direct materials standards had been set at 100 pounds of direct materials at $2 per pound for each product produced. During the year, the company purchased and used 98,000 pounds of direct materials; the cost was $2.04 per pound. At the beginning of last year, Diekow Productions set budgeted fixed overhead costs at $456,000. During the year, actual fixed overhead costs were $500,000.
Calculate Diekow Production's fixed overhead budget and volume variances for the year. Assume that fixed overhead is applied based on units of product.
Fixed overhead budget variance $ Fixed overhead volume variance $Explanation / Answer
6000
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