Diekow Productions manufactured and sold 1,000 products at $11,000 each during t

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.

At the beginning of last year, Diekow Productions set variable overhead standards of 10 machine hours at a rate of $10 per hour for each product produced. During the year, 10,800 machine hours were used at a cost of $10.20 per hour.

Calculate Diekow Production's fixed overhead budget and volume variances for the year. Assume that fixed overhead is applied based on units of product.

Variable overhead efficiency variance $8000

Variable overhead spending variance $2160

Fixed overhead volume variance $

Fixed overhead budget variance $44,000

I could calculate everything except Fixed overhead volume variance.

Explanation / Answer

Fixed overhead volume variance = Fixed overhead absorbed -Budgeted fixed overhead =$500,000-$456,000 =$44000

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