Underfoot Products Uses Standard Costing Compute the Fixed Overhead Volume Variance

question 40

Multiple Choice

Underfoot Products uses standard costing. The following information about overhead was generated during May: $\begin{array}{ll}\text { Standard variable overhead rate } & \$ 2 \text { per machine hour } \\\text { Standard fixed overhead rate } & \$ 1 \text { per machine hour } \\\text { Actual variable overhead costs } & \$ 390,000 \\\text { Actual fixed overhead costs } & \$ 175,000 \\\text { Budgeted fixed overhead costs } & \$ 190,000 \\\text { Standard machine hours per unit produced } & 10 \\\text { Good units produced } & 18,000 \\\text { Actual machine hours } & 200,000\end{array}$ Compute the fixed overhead volume variance.

• A) $5,000 (U)
• B) $10,000 (U)
• C) $10,000 (F)
• D) $15,000 (F)

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Definitions:

Inhibit

To prevent or restrict a particular action or operation, often used in the context of control systems.

Enable

To make something operational or to grant the authority or means to do something.

Boolean

A binary system that represents values and logical operations using true (1) and false (0) states.

Parallel

Refers to lines or paths that remain the same distance apart over their entire length, never intersecting, or in electronics, to components connected side-by-side, allowing current to divide among paths.