Asked by Derise Major on Jun 27, 2024
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During November, Heim Company allocated overhead to products at the rate of $26.00 per direct labor hour. This figure was based on 80% of capacity or 1,600 direct labor hours. However, Heim Company operated at only 70% of capacity, or 1,400 direct labor hours. Budgeted overhead at 70% of capacity is $38,900, and overhead actually incurred was $38,000. What is the company's volume variance for November? (Indicate whether the variance is favorable or unfavorable)
Volume Variance
An assessment of the impact of production or sales volume differences on a company's revenue or expenses, relative to budgeted amounts.
- Comprehend the principles of overhead variances, incorporating both controllable and volume differences.
- Examine how different levels of capacity influence budgeting and the analysis of variances.
Verified Answer
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Learning Objectives
- Comprehend the principles of overhead variances, incorporating both controllable and volume differences.
- Examine how different levels of capacity influence budgeting and the analysis of variances.