Cheshire, Inc

question 73

Essay

Cheshire, Inc. allocates fixed overhead at a rate of $18 per direct labor hour. This amount is based on 90% of capacity or 3,600 direct labor hours for 6,000 units. During May, Cheshire produced 5,500 units. Budgeted fixed overhead is $66,000, and overhead incurred was $67,000.
Required:
Determine the volume variance for May.

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Definitions:

BATNA

Best Alternative To a Negotiated Agreement, the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached.

Power Imbalance

A situation where one party in a relationship or negotiation has significantly more influence or control than the other.

Make It Hard to Say No

A negotiation strategy aimed at presenting one's case so compellingly that the other party finds it difficult to decline the offer.

Change the Game

A strategy or approach aiming to fundamentally alter the existing dynamics or rules in a situation or competition.