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    panchaga's Avatar
    panchaga Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Oct 18, 2010, 07:31 PM
    Managerial accounting question
    Xyz Company uses standard costing. Overhead is applied at $12 per machine hour. Data for the month of March follows:

    Actual overhead costs $194,000
    Standard machine hours allowed for actual production 16,500
    Actual machine hours used 17,400
    Flexible budget overhead for standard hours allowed 208,800
    The overhead volume variance is:
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Oct 20, 2010, 09:33 PM

    Here is the formula for volume variance:

    (Standard hours allowed - actual hours worked) x standard overhead rate.

    Plug in the figures and you have your answer.
    panchaga's Avatar
    panchaga Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Oct 21, 2010, 10:33 PM
    Comment on rehmanvohra's post
    Thank you very much
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