Given that the fixed overhead assigned to the actual units produced is $7,500 and the budgeted fixed overhead totals $21,000, what is the production volume variance?

Multiple choice question for Flexible Budget Overhead Cost Variance. Select an option, then review the explanation below.

Explanation

The production volume variance is calculated by subtracting the fixed overhead allocated to actual output from the budgeted fixed overhead: $21,000 - $7,500 = $13,500. This variance represents the difference due to the level of production volume.

Practice related questions from the same subject.

1.What could be the reason for a budget overrun if the machine time standards are set unrealistically low?
2.Given that the actual variable quantity is 70, with actual overhead costs of $8,650 and budgeted overhead costs of $3,500, what is the variable overhead spending variance?
3.What is the initial step in establishing the cost rate for budgeted variable overhead?
4.Given that the fixed overhead assigned to actual units produced amounts to $25,000 and the production volume variance is $9,000, what is the budgeted fixed overhead?
5.Allocating additional resources to establish core standards is known as which type of response?

Given that the fixed overhead assigned to the actual units produced is $7,500 and the budgeted fixed overhead totals $21,000, what is the production volume variance?

Explanation

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