Neptune Inc The Total Factory Overhead Spending Variance in April for Neptune

question 147

Multiple Choice

Neptune Inc. uses a standard cost system and has the following information for the most recent month, April: $\begin{array}{lr}\text { Actual direct labor hours (DLHs) worked } & 17,000 \\\text { Standard DLHs allowed for good output produced this period } & 18,000 \\\text { Actual total factory overhead costs incurred } & \$ 45,400 \\\text { Budgeted fixed factory overhead costs } & \$ 10,800 \\\text { Denominator activity level, in direct labor hours (DLHs) } & 15,000 \\\text { Total factory overhead application rate per standard DLH } & \$ 2.70\end{array}$ The total factory overhead spending variance in April for Neptune, Inc., to the nearest whole dollar, was:

• A) $940 unfavorable.
• B) $1,040 favorable.
• C) $1,980 favorable.
• D) $2,160 favorable.
• E) $3,200 favorable.

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Definitions:

Monthly Budget

A financial plan that allocates expected income towards expenses, savings, and debt repayment on a monthly basis.

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The amount of income that remains after deducting all expenses, taxes, and costs from gross income.

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