Bonehead Co Under a Two-Variance Analysis (Breakdown) of the Total Overhead Variance

question 137

Multiple Choice

Bonehead Co. has the following factory overhead costs for the most recent period: $\begin{array}{lr}\text { Standard overhead cost applied to this period's production } & \$ 72,000 \\\text { Flexible budget for overhead based on output (i.e., units produced) } & 65,000 \\\text { Total budgeted overhead in the master (static) budget } & 86,000 \\\text { Actual total overhead cost incurred during the period } & 76,000\end{array}$ Under a two-variance analysis (breakdown) of the total overhead variance for the period, the total overhead flexible-budget (FB) variance, to the nearest whole dollar, is:

• A) $4,000 unfavorable.
• B) $7,000 favorable.
• C) $10,000 favorable.
• D) $11,000 unfavorable.
• E) $14,000 unfavorable.

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