Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 CDs for which the standard cost for each CD is: Plastic (0.25 pounds at $6.00 per pound) $1.50 1.20 1.60 Total $4.30 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 2021: Actual production 112,000 CDs Actual variable overhead $91,000 Actual fixed overhead $85,500 How much is the controllable overhead variance for 2021? Labor (0.10 hour at $12.00 per hour) Overhead ($0.70 fixed and $0.90 variable) a) $4,400 favorable b) $1,300 favorable c) $1,600 favorable d) $5,000 favorable e) $1,800 favorable
Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 CDs for which the standard cost for each CD is: Plastic (0.25 pounds at $6.00 per pound) $1.50 1.20 1.60 Total $4.30 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 2021: Actual production 112,000 CDs Actual variable overhead $91,000 Actual fixed overhead $85,500 How much is the controllable overhead variance for 2021? Labor (0.10 hour at $12.00 per hour) Overhead ($0.70 fixed and $0.90 variable) a) $4,400 favorable b) $1,300 favorable c) $1,600 favorable d) $5,000 favorable e) $1,800 favorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dd.65.
Transcribed Image Text:Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 CDs for which the
standard cost for each CD is:
Plastic (0.25 pounds at $6.00 per pound)
Labor (0.10 hour at $12.00 per hour)
Overhead ($0.70 fixed and $0.90 variable)
$1.50
1.20
1.60
$4.30
Total
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 2021:
Actual production
112,000 CDs
Actual variable overhead
$91,000
Actual fixed overhead
$85,500
How much is the controllable overhead variance for 2021?
a) $4,400 favorable
b) $1,300 favorable
c) $1,600 favorable
d) $5,000 favorable
e) $1,800 favorable
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