Stiller Corporation incurred fixed manufacturing costs of $ 32,000 during 2015.

Question

Stiller Corporation incurred fixed manufacturing costs of $ 32,000 during 2015. Other information for 2015? includes:

The budgeted denominator level is 3,000 units.

Units produced total 1,600 units.

Units sold total 1,400 units.

Beginning inventory was zero.

The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.

1) Fixed manufacturing costs included in ending inventory total? ________.

2) The production-volume variance is? ________.

Explanation / Answer

1.Fixed manufacturing costs included in ending inventory total

= (1600 Units – 1400 Units) x ($32,000 / 3000 Units)

= 200 Units x $10.67

= $2,134

2.The production-volume variance

= (3000 Units – 1600 Units) x ($32,000 / 3000 Units)

= 1400 Units x $10.67

= $14.938

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