Overhead Spending Variance and Volume Variance
Case Study: Maximizing Profits from Sales of Soft Drinks
July 9, 2019Telemarketing: interaction of time and position, pairwise, T
July 9, 2019From the following information for Alfred Industries, compute the overhead spending varianceand the volume variance:
Standard manufacturing overhead based on normal monthly volume:
Fixed ($300,000 divided 20,000 units)…………………………………….. $15.00
Variable ($100,000 divided 20,000 units)………………………………….. 5.00 $20.00
Units actually produced in current month…………………………………… 18,000 units
Actual overhead costs incurred (including $300,000 fixed)…………… $383,800
This solution shows how to compute the overhead spending variance and the volume variance for Alfred Industries, given the fixed, variable and actual manufacturing overhead costs and the amount of units produced in the current month.
