Litchfield Industries Gathered the Following Information for the Month Ended

question 65

Multiple Choice

Litchfield Industries gathered the following information for the month ended June 31: The static budget volume is 5,500 units:
Overhead flexible budget:
Actual production was 12,000 units. Actual overhead costs were $28,000 for variable costs and $37,000 for fixed costs. Actual machine hours worked were 16,000 hours.
What is the fixed overhead volume variance? (Assume the allocation base for fixed overhead costs is machine hours.)

• A)$42,250 unfavorable
• B)$42,250 favorable
• C)$36,400 unfavorable
• D)$36,400 favorable

---

Definitions:

Biased

Showing prejudice for or against someone or something in a way that's considered unfair or unequal.

Contrast Errors

A common mistake in performance appraisal where an employee's evaluation is unfairly influenced by comparing them to others rather than against objective standards.

Rank Employees

The process of evaluating and ordering employees based on their performance, skills, or other relevant criteria.

Trait-oriented Evaluation

An assessment approach that focuses on the specific traits or characteristics of employees in relation to job performance.