it is
(210000-22000)= 10000 hrs X $5/hr =$ 50000 ( adverse)
hamzanajam @ h o t m a i l . c o m
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Actual overhead turned out to be $1,100,000. Actual labor hours were 220,000 which exceeded the standard hours of 210,000 for that volume activity.
What is the volume variance for overhead?
(210000-22000)= 10000 hrs X $5/hr =$ 50000 ( adverse)
hamzanajam @ h o t m a i l . c o m
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Step 1: Calculate the standard overhead based on the standard labor hours:
Standard overhead = Standard labor hours * Predetermined overhead rate
Standard overhead = 210,000 labor hours * $5/hour
Standard overhead = $1,050,000
Step 2: Calculate the actual overhead:
Actual overhead = $1,100,000
Step 3: Calculate the volume variance:
Volume variance = Actual overhead - Standard overhead
Volume variance = $1,100,000 - $1,050,000
Volume variance = $50,000
Therefore, the volume variance for overhead is $50,000.