Hanson Produces Pressure Washers Actual Production for the Year Totaled 62,000 Units

question 40

Multiple Choice

Hanson produces pressure washers. The detail for the overhead estimates follows: $\begin{array}{lrr}\text { Variable Overhead } &\text { Budget } @ 60,000 \text { units }& \text { Actual Costs }\\\hline \text { Indirect materials } & \$ 480,000 & \$ 469,500 \\\text { Utilities } & 120,000 & 93,000 \\\text { Maintenance } & 180,000 & 224,000 \\\text { Total variable overhead } & 780,000 & 786,500\\\\ \text { Fixed Overhead }\\\hline \text { Supervisor salaries } & 125,000 & 127,000 \\\text { Depreciation } & 150,000 & 145,000 \\\text { Other fixed overhead } & 25,000 & 26,000 \\\text { Total fixed overhead } & 300,000 & 298,000 \\\text { Total overhead costs } & \$ 1,080,000 & \$ 1,084,500\end{array}$ Actual production for the year totaled 62,000 units. How much is the overhead volume variance?

• A) $72,000 favorable
• B) $77,580 favorable
• C) $63,940 favorable
• D) $74,000 favorable

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