The Following Information Is Available from the Terry Company What Is the Fixed Overhead Production Volume Variance for Terry

question 42

Multiple Choice

The following information is available from the Terry Company: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 25,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,400 \\\text { Budgeted fixed overhead expenses } & \$ 11,000 \\\text { Actual direct labor hours (DLH) worked } & 4,400 \\\text { Standard DLHs for this period's production (output) } & 4,000 \\\text { Standard variable overhead rate per DLH } & \$ 3.00 \\\text { Standard fixed overhead rate per DLH } & \$ 2.50\end{array}$ What is the fixed overhead production volume variance for Terry Company for the period, to the nearest whole dollar?

• A) $600 favorable.
• B) $1,000 unfavorable.
• C) $1,200 unfavorable.
• D) $1,400 favorable.
• E) $1,400 unfavorable.

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Definitions:

Capital/Money

Financial assets or their financial value used to fund operations and investments in a business.

Entrepreneurship Stage

Describes a phase in the lifecycle of a new business venture, ranging from the idea conception to establishing the business and its eventual growth or closure.

Small Business Management

The ongoing process of owning and operating an established business.

Triggering Event

A specific occurrence that causes a process to start, or significantly impacts the course of an ongoing situation.