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Calculating the Fixed Overhead Spending and Volume Variances Standish Company manufactures consumer products and provided the following information for the month of February:
Units produced 131,000 Standard direct labor hours per unit 0.2 Standard fixed overhead rate (per direct labor hour) $2.30 Budgeted fixed overhead $64,100 Actual fixed overhead costs $68,600 Actual hours worked 26,450
Required:
1. Calculate the fixed overhead spending variance using the formula approach.
$
Favorable
Unfavorable
2. Calculate the volume variance using the formula approach.
$
Favorable
Unfavorable
3. What if 129,600 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below.
Fixed Overhead Spending Variance $
Favorable
Unfavorable
Volume Variance $
Favorable
Unfavorable
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