Zero Company's Standard Factory Overhead Rate Is $3

question 11

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 was $3,800 for 840 actual DLHs, of which $1,300 was for fixed factory overhead.

Under a four-way breakdown (decomposition) of the total overhead variance, what is the variable factory overhead spending variance for Zero Company for December (to the nearest whole dollar) ?

• A) $50 favorable.
• B) $225 favorable.
• C) $425 unfavorable.
• D) $610 unfavorable.
• E) $650 unfavorable.

---

Definitions:

Enlarged Ventricles

A condition where the ventricles of the heart or brain are increased in size, which can affect their function and is often a sign of an underlying condition.

Reticular Formation

A network of nerve pathways in the brainstem involved in consciousness and alertness.

Arousal Control

The process of managing the physiological and psychological state of being alert or stimulated, often in relation to performance in stressful or demanding situations.

Physical Coordination

The ability to move different parts of the body smoothly and efficiently to achieve a particular action or task.