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.

---

Definitions:

Shorting Index Futures

A strategy involving selling index futures contracts in anticipation of a decline in the index's value to profit from falling market prices.

Foreign Currency

The currency of another country that is required to conduct foreign trade and business transactions.

Futures Contract

A legal document that obligates parties to buy or sell a commodity at a price determined in advance, on a specified future date.

Assembly

The process of putting together various components or parts to form a finished product.