Elgin Company's Budgeted Fixed Factory Overhead Costs Are $50,000 Per

question 70

Multiple Choice

Elgin Company's budgeted fixed factory overhead costs are $50,000 per month plus a variable factory overhead rate of $4.00 per direct labor hour. The standard direct labor hours allowed for October production were 20,000. An analysis of the factory overhead indicates that in October Elgin had an unfavorable controllable variance of $1,500 and a favorable volume variance of $500. Elgin uses a two-variance analysis of overhead variances. The actual factory overhead incurred in October is:

• A)$126,500.
• B)$128,000.
• C)$128,500.
• D)$131,500.

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Definitions:

Innovation

The process of developing new products, services, or methods, often leading to increased efficiency or value.

Economic Profit

The difference between a firm's total revenue and total costs, including both explicit and implicit costs, measuring the firm's performance beyond the basic business costs.

Investment

The action of designating capital with the intention of securing an income or a financial return.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.