Rumington Popcorn Uses a Standard Cost System and Applies Overhead

question 31

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 overhead volume variance for 2014?

• A) $2,000 favorable
• B) $28,000 unfavorable
• C) $8,000 favorable
• D) $28,000 favorable

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Definitions:

Alcoholism

A chronic disease characterized by uncontrolled drinking and preoccupation with alcohol, negatively affecting social and health aspects.

Maladaptive

Behaviors or actions that are counterproductive to coping with problems or situations effectively, often worsening the situation.

Medical Model

The medical model is an approach to health which focuses on illness or disability as a problem of the body, requiring medical intervention.

Abnormal Behavior

Actions or patterns of behavior that deviate significantly from what is considered typical or normal within a culture or society.