Rumington Popcorn Uses a Standard Cost System and Applies Overhead

question 78

Multiple Choice

Rumington Popcorn uses a standard cost system and applies overhead on a per unit basis. The company estimated that 30,000 units would be produced in 2014 and uses this quantity to establish its standard overhead cost per unit. The cost formula for overhead costs used to develop the standard overhead cost per unit was:
Overhead = $120,000 + $6 per unit
During the year, actual overhead cost was $340,000. Actual units produced were 32,000. How much is the controllable overhead variance for 2014?

• A) $20,000 favorable
• B) $20,000 unfavorable
• C) $28,000 favorable
• D) $28,000 unfavorable

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