Exter Manufacturing Experienced the Following Activity Over the Last Four

question 61

Multiple Choice

Exter Manufacturing experienced the following activity over the last four years. The firm's estimated fixed overhead allocation rate was unchanged over the 4 years at $200 per unit, based on budgeted fixed overhead of $200,000 and 1,000 units of output. The volume variance is closed to the cost of goods sold each year. Exter maintains an absorption costing system. The volume variance for Year 2 is

• A) $40,000 Unfavorable
• B) $60,000 Favorable
• C) $100,000 Unfavorable
• D) $20,000 Favorable