If the fixed overhead allocated for actual output unit is $9800 and budgeted fixed overhead is $22000, then production volume variance would be _________?
Correct answer: C. $12,200
- A. $31,800
- B. $12,300
- C. $12,200
- D. $41,800Accounting & Auditing
Explanation
Production volume variance is calculated as budgeted fixed overhead minus fixed overhead applied to actual output: $22,000 − $9,800 = $12,200. The result indicates an unfavorable variance, but its amount is $12,200.
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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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