Hatter,Inc

question 174

Essay

Hatter,Inc.allocates fixed overhead at a rate of $17 per direct labor hour.This amount is based on 90% of capacity or 3,600 direct labor hours for 6,000 units.During July,Hatter produced 5,500 units.Budgeted fixed overhead is $66,000,and overhead incurred was $67,000.
Required:
Determine the volume variance for July.

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Definitions:

Supply-side

An economic theory that proposes reducing barriers on the production of goods and services, such as lowering taxes and decreasing regulation, will stimulate economic growth.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Isomorphism

A concept in sociology that refers to the process by which organizations in the same sector or context become increasingly similar to each other in structure and function.

Hybrid System

A combination of different technologies, methodologies, or systems that integrate to function together, often bringing together the best features of each.