Zero Company's Standard Factory Overhead Rate Is $3

question 14

Multiple Choice

Zero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH) , calculated at 90% capacity = 900 standard DLHs. In December, the company operated at 80% of capacity, or 800 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,150, of which $1,350 is fixed overhead. For December, the actual factory overhead cost incurred was $3,800 for 840 actual DLHs, of which $1,300 was fixed factory overhead.

What is the fixed overhead production volume variance, to the nearest whole dollar, for Zero Company in December?

• A) $0.
• B) $150 unfavorable.
• C) $225 favorable.
• D) $425 unfavorable.
• E) $650 unfavorable.

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Definitions:

Environment

The surrounding physical, social, and cultural conditions in which an individual lives and develops.

Adaptations

Changes in organisms over time that enhance their survival and reproductive success in a particular environment.

Behavioral Inhibition

A temperament characterized by a tendency to react with fear or withdrawal in new or unfamiliar situations.

Novel Situations

New or unfamiliar circumstances that an individual has not previously encountered, often requiring adaptation or problem-solving.