Tycoon Manufacturing Uses a Standard Costing System The Fixed Overhead Production Volume Variance Was:
A) $3,000 F

question 148

Multiple Choice

Tycoon Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 5,000 units monthly. Overhead costs were estimated to be $250,000. The standard variable overhead rate is $5 per machine hour. During October the following results were recorded:
$\begin{array} { l l } \text { Units produced } & 4,900 \\\text { Units sold } & 4,600 \\\text { Machine hours required } & 20,500 \\\text { Actual overhead cost } & \$ 248,000\end{array}$
The fixed overhead production volume variance was:

• A) $3,000 F
• B) $4,500 U
• C) $1,500 F
• D) $3,000 U

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Definitions:

Relative Price

The price of one good or service compared to another, usually considered in terms of opportunity cost.

Demand for Labor

The aggregate number of employees that employers intend and can employ at a particular rate of wages over a certain interval.

Total Product Schedule

A table or graph that shows the output produced by a firm with different quantities of variable input, holding all other inputs constant.

Market Wage Rate

The prevailing rate of pay for given types of labor in the market, determined by supply and demand.