The Standard Factory Overhead Rate Is $7 ? What Is the Amount of the Variable Factory Overhead

question 56

Multiple Choice

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: $$\begin{array} { l l r } \text { Actual: } & \text { Variable factory overhead } & \$ 360,000 \\& \text { Fixed factory overhead } & 104,000 \\\text { Standard: } & 60,000 \text { hours at } \$ 7.50 & 450,000\end{array}$$ ? What is the amount of the variable factory overhead controllable variance?

• A) $12,000 unfavorable
• B) $12,000 favorable
• C) $14,000 unfavorable
• D) $26,000 unfavorable

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Definitions:

Onset of Crawling

The stage in a baby's development when they start to move on their hands and knees.

Myelination

The process of forming a myelin sheath around a nerve to improve the speed at which electrical impulses are passed along the nerve fiber.

Neural Impulses

Electrical and chemical signals transmitted along neurons, facilitating communication within the nervous system.

Myelin

An insulating material that forms a sheath around certain axons and speeds the transmission of nerve impulses from one neuron to the next.