Eminem, Inc. manufactures music CDs. At the start of 2020, Eminem planned to produce 112,000 CDs for which the standard cost for each CD is: Plastic (0.25 pounds at $6.00 per pound) $1.50 Labor (0.10 hour at $12.00 per hour) 1.20 Overhead ($0.60 fixed and $0.90 variable) 1.50 Total
Eminem, Inc. manufactures music CDs. At the start of 2020, Eminem planned to produce 112,000 CDs for which the
|
Plastic (0.25 pounds at $6.00 per pound) |
$1.50 |
|
Labor (0.10 hour at $12.00 per hour) |
1.20 |
|
|
1.50 |
|
Total |
$4.20 |
Overhead is allocated based on the number of units produced. Eminem isolates material purchase variances at the point of purchase. The following information summarizes Eminem’s results for 2020:
|
Actual production |
111,000 CDs |
|
Actual variable overhead |
$64,000 |
|
Actual fixed overhead |
$83,000 |
How much is the overhead volume variance for 2020?
|
$600 unfavorable |
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$1,200 unfavorable |
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$600 favorable |
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$1,200 favorable |
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|
$1,500 favorable |
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