Wangerin Corporation applies overhead to products based on m

Wangerin Corporation applies overhead to products based on machine-hours. The denominator level of activity is 8,300 machine-hours. The budgeted fixed manufacturing overhead costs are $301,290. In April, the actual fixed manufacturing overhead costs were $307,100 and the standard machine-hours allowed for the actual output were 8,600 machine-hours. Required: a. Compute the budget variance for April. b. Compute the volume variance for April (Input all amounts as positive values.) a. Budget variance b. Volume variance

Solution

a Budget variance = Actual fixed overhead cost - Budgeted fixed overhead cost = 307100-301290= $5810 U b Overhead rate = 301290/8300= 36.3 Volume variance = 36.3*(8600-8300)= $10890 F