AirPro Corp. reports the following for November. Actual total factory overhead i

Question

AirPro Corp. reports the following for November. Actual total factory overhead incurred $ 28,425 Standard factory overhead: Variable overhead $ 2.10 per unit produced Fixed overhead ($11,100/22,200 predicted units to be produced) $ 2.00 per unit Predicted units to produce 11,100 units Actual units produced 9,500 units Compute the overhead volume variance for November and classify it as favorable or unfavorable.

Volume Variance

Total Budgeted fixed overhead

total overhead fixed overapplied

volume variance

Explanation / Answer

Fixed overhead ( Budget for 9500 Units) = 9500 * 2 = 19000

Fixed overhead ( Budget for 11100 units) = 22200

Volume variance = 19000 - 22200 = 3200 Unfavorable

Actual fixed overhead = 28425 - 9500 * 2.10 = 8475

Total Fixed overhead overapplied = 19000 - 8475 = 10525 Favorable

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