posted by Leslie .
Original budget for 2009 included $600,000 fixed overhead and $400,000 variable overhead. Labor hours were estimated at 200,000 labor hours. The predetermined overhead rate was $5 per hour.
Actual overhead turned out to be $1,100,000. Actual labor hours were 220,000 which exceeded the standard hours of 210,000 for that volume activity.
What is the volume variance for overhead?
(210000-22000)= 10000 hrs X $5/hr =$ 50000 ( adverse)
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