Cheshire, Inc. allocates fixed overhead at a rate of $18 per direct labor hour. This amount is based on 90% of capacity or 3,600 direct labor hours for 6,000 units. During May, Cheshire produced 5,500 units. Budgeted fixed overhead is $66,000, and overhead incurred was $67,000.
Required:
Determine the volume variance for May.

Question

Jesus Brito · Accepted Answer

Final Answer : (3,600 DLH/6,000 units) x 5,500 units = 3,300 direct labor hours

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