The Standard Factory Overhead Rate of Quaker Inc ? What Is the Amount of the Variable Factory Overhead

question 77

Multiple Choice

The standard factory overhead rate of Quaker Inc.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: $$\begin{array} { l l r } \text { Standard: } & 25,000 \text { hours at } \$ 10 & \$ 250,000 \\\text { Actual: } & \text { Variable factory overhead } & 202,500 \\& \text { Fixed factory overhead } & 60,000\end{array}$$ ? What is the amount of the variable factory overhead controllable variance?

• A) $10,000 favorable
• B) $2,500 unfavorable
• C) $10,000 unfavorable
• D) $2,500 favorable

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