Exercise 11-14 (continued)
Alternative approach to the budget variance:
Budget = Actual fixed - Budgeted fixed
variance overhead cost overhead cost
= $302,400 - $300,000
= $2,400 U
Alternative approach to the volume variance:
⎛ ⎞⎟
Fixed portion of Standard
⎜ ⎟
Volume = the predetermined Denominator - hours
Variance overhead rate hours allowed
⎜⎝ ⎠
= $5 per hour (60,000 hours - 63,000 hours)
= $15,000 F
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Solutions Manual, Chapter 11 659
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