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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › standard costing
A company budgeted to produce and sell 850 units.
Direct materials 1.6kg/unit and $10/kg
Direct labour 2hours/unit and $5/hour
variable overhead absorption $3.8 per direct labour hour.
Fixed overheads absorption rate $4.50 per direct labour hour based upon budgeted production.
Actual performance for the last period was as follows:
(1) 800 units were produced
(2) 1,750 direct labour hours were worked.
(3) Fixed overheads incurred were $7,240
(4) Variable overheads were $6,600
calculate fixed overheads volume variance.
My answer for this was 450 adverse but the one given in the solution is 635 favourable. Please help me and thank you.