The Standard Factory Overhead Rate Is $10 Per Direct Labor

question 64

Multiple Choice

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal 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: 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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