If the fixed overhead allocated for actual output unit is $7500 and budgeted fixed overhead is $21000, then the production volume variance will be __________?
Correct answer: D. $13,500
- A. $16,500
- B. $15,500
- C. $14,500
- D. $13,500
Explanation
Production volume variance compares budgeted fixed overhead with fixed overhead applied to actual output. The difference is $21,000 − $7,500 = $13,500, so option d represents an unfavorable variance.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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