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Accounting
Geovanni Inc. uses standard costs to prepare its flexible budget. Standard and actual costs data for manufacturing overhead for producing 5,000 units of product are as follows: Standard and actual costs data for manufacturing overhead Costs Rate  Allocation base per unit Variable overhead $8 per direct labor hour  2 hours  Fixed overhead                                               (based on 12,000 hours at 100% capacity) $3 per direct labor hour  2 hours  Actual total overhead costs are as follows: Actual Total Overhead Costs Costs Amounts Total variable overhead costs $58,000 Total fixed overhead costs  $20,000 Compute the fixed overhead cost variance. Group of answer choices -$7,000 favorable $10,000 unfavorable -$10,000 favorable $18,000 unfavorable

Geovanni Inc. uses standard costs to prepare its flexible budget. Standard and actual costs data for manufacturing overhead for producing 5,000 units of product are as follows: Standard and actual costs data for manufacturing overhead Costs Rate  Allocation base per unit Variable overhead $8 per direct labor hour  2 hours  Fixed overhead                                               (based on 12,000 hours at 100% capacity) $3 per direct labor hour  2 hours  Actual total overhead costs are as follows: Actual Total Overhead Costs Costs Amounts Total variable overhead costs $58,000 Total fixed overhead costs  $20,000 Compute the fixed overhead cost variance. Group of answer choices -$7,000 favorable $10,000 unfavorable -$10,000 favorable $18,000 unfavorable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Geovanni Inc. uses standard costs to prepare its flexible budget. Standard and actual costs data for manufacturing overhead for producing 5,000 units of product are as follows:

Standard and actual costs data for manufacturing overhead
Costs Rate  Allocation base per unit
Variable overhead $8 per direct labor hour  2 hours 
Fixed overhead                                               (based on 12,000 hours at 100% capacity) $3 per direct labor hour  2 hours 

Actual total overhead costs are as follows:

Actual Total Overhead Costs
Costs Amounts
Total variable overhead costs $58,000
Total fixed overhead costs  $20,000

Compute the fixed overhead cost variance.

Group of answer choices
-$7,000 favorable
$10,000 unfavorable
-$10,000 favorable
$18,000 unfavorable
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