Titus Company produced 8,900 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity.

Determine the fixed factory overhead volume variance.

$90

Explanation:

Factory overhead volume variances refers to difference between the budgeted fixed overhead at 100% of normal capacity, and the standard fixedd overheads for the actual units produced.

The factory overhead voume variance can be calculated as follows :

Fixed factory overhead volume variance = (Standard hours for    

                                                                      the 100% of normal

                                                                      capacity - Standard  

                                                                      hours for the actual

                                                                     unit produced)x(fixed

                                                                   factory overhead rate)

To solve the question we have,

Unit produced 8,900 units of a product in 3.25 standard hours per unit

= 8,900 x 3.25

=28925 hours

cost per unit = $1.20 per hour

hours at 100% normal capaity = 29,000 hours

fixed factory overhead volume variance = ?

Formula:

Fixed factory overhead volume variance = (Standard hours for    

                                                                      the 100% of normal

                                                                      capacity - Standard  

                                                                      hours for the actual

                                                                     unit produced)x(fixed

                                                                   factory overhead rate)

Solution:

Fixed factory overhead volume variance =  (29,000 hours -  

                                                         28,925 hours) x   $1.20  

                                                                      =   75 x $1.20

                                                                     = $90

answer; (inseparability);

answer; buying the bill at a discount from the face value to be received at maturity;