The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: Standard: 25,000 hours at $10 $250,000 Actual: Variable factory overhead $202,500 Fixed factory overheard 60,000 What is the amount of the factory overhead volume variance? a. $12,500 favorable b. $10,000 favorable c. $12,500 unfavorable d. $10,000 unfavorable

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 2EA: Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2...
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The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based
on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units
during May were as follows:
Standard:
25,000 hours at $10
$250,000
Actual:
Variable factory overhead
$202,500
Fixed factory overheard
60,000
What is the amount of the factory overhead volume variance?
a. $12,500 favorable
b. $10,000 favorable
c. $12,500 unfavorable
d. $10,000 unfavorable
Transcribed Image Text:The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: Standard: 25,000 hours at $10 $250,000 Actual: Variable factory overhead $202,500 Fixed factory overheard 60,000 What is the amount of the factory overhead volume variance? a. $12,500 favorable b. $10,000 favorable c. $12,500 unfavorable d. $10,000 unfavorable
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