Kris Company calculates its predetermined rates using practical volume, which is 325,000 units. The standard...
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Kris Company calculates its predetermined rates using practical volume, which is 325,000 units. The standard cost system allows 3 direct labor hours per unit produced. Overhead is applied using direct labor hours. The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead. The actual results for the year are as follows:
| Units produced: | 318,000 |
| Direct labor: | 965,000 hours @ $12.00/hour |
| Variable overhead: | $3,302,000 |
| Fixed overhead: | $998,000 |
Calculate the fixed overhead volume variance.
a.$20,000 F
b.$22,000 F
c.$32,000 U
d.$4,000 U
e.None of these choices are correct.
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