Compute the volume variance for each year. Troy Company introduced a new product...
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Accounting
Compute the volume variance for each year.
Troy Company introduced a new product three years ago. Troy uses standard costing to account for the costs. The predetermined fixed overhead rate is based on budgeted normal utilization of 10,000 units per year. There were no price, spending, or efficiency variances. Production volume variances are closed to cost of goods sold. Relevant information for the Years 1, 2, and 3 follows: Year 1 Year 2 Year 3 Units produced 10,000 14,000 8,000 Units sold 9,800 10,000 10,800 Selling price $75 per unit Direct materials 9 per unit Direct labor 15 per unit Variable manufacturing overhead 12 per unit Variable marketing & administrative 8 per unit Fixed manufacturing overhead $110,000 Fixed marketing & administrative $ 75,000
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