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standard costing

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

  • This topic has 1 reply, 2 voices, and was last updated 9 months ago by AvatarJohn Moffat.
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  • July 27, 2025 at 11:30 am #718570
    AvatarUbaid647
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    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.

    July 28, 2025 at 8:59 am #718579
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    The correct answer is 450 adverse (on the question as you have typed it).
    Where did you find this question?

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