Channel One Industries Uses a Standard Costing System to Apply

question 151

Multiple Choice

Channel One Industries uses a standard costing system to apply manufacturing costs to its production process. In May, Channel One anticipated producing 2,450 units with fixed manufacturing overhead costs allocated at $7.40 per direct labor hour with a standard of 1.5 direct labor hours per unit. In May, actual production was 3,200 units and actual fixed manufacturing overhead costs were $23,000. What was Channel One's fixed manufacturing overhead volume variance for May?

• A)$4,195 favorable
• B)$4,195 unfavorable
• C)$8,325 favorable
• D)$8,325 unfavorable

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Definitions:

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