Question

Holl Corporation has provided the following data for November. Denominator level of activity 5,500 machine-hours Budgeted fixed manufacturing overhead costs $ 68,750 Standard machine-hours allowed for the actual output 5,800 machine-hours Actual fixed manufacturing overhead costs $ 67,650 Required: a. Compute the budget variance for November. b. Compute the volume variance for November. (Input all amounts as positive values.)

Budget Variance: ______ ______

Volume Variance: _______ _______

Answer 1

Answer :-

Given date tabulated as follows :-

Particulars	Budgeted	Actual
Fixed manufacturing Overhead ($)	$68,750	$67,650
Machine hours	5,500	5,800

Computation of budget variance for the November month.

Fixed overhead Budget variance = Budgeted fixed overhead - actual fixed overhead

=$68,750 - $67,650

= $1,100 (F).

# Calculation of volume variance :-

Fixed over head volume variance = applied fixed overhead - budgeted fixed overhead.

Standard fixed over head rate per hour = Budgeted fixed over head ÷ Standard machine hours

= $68,750 ÷ 5500 hours

= $ 12.50 per hour.

Applied fixed overhead = standaard fixed over head rate per hour × Actual machine hours

= $12.50 per hour × 5800 hours

= $ 72,500.

Budgeted fixed overhead = $68750. (Given)

Fixed over head volume variance = $72,500 - $68,750

= $3,750 favourable

# Budgeted fixed overhead volume variance =

$3,750 favourable.

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