What the company fixed overhead volume variance for the year

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Question - Amado Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labor hours. The information below is taken from the company's flexible budget for manufacturing overhead:

Percent of capacity

70%

80%

90%

Direct labor hours

21,000

24,000

27,000

Variable overhead

$ 42,000

$ 48,000

$ 54,000

Fixed overhead

108,000

108,000

108,000

Total overhead

$150,000

$156,000

$162,000

During the year, the company operated at exactly 80% of capacity, but applied manufacturing overhead to products based on the 90% level. What the company fixed overhead volume variance for the year?

Reference no: EM133134896

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