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standard costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › standard costing

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  • July 27, 2025 at 11:30 am #718570
    Ubaid647
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    • Topics: 1
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    • ☆

    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.

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