Bluecap Co During 2019, Bluecap Worked 28,000 DLHs and Manufactured 9,600 Units

question 53

Multiple Choice

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: $\begin{array}{lrr}\text { Denominator volume-number of units }&8,000\\\text { Denominator volume-percent of capacity }&80\%\\\text { Denominator volume-standard direct labor hours (DLHs) } & 24,000 \\\text { Budgeted variable factory overhead cost at denominator volume } & \$103,200 \\\text { Total standard factory overhead rate per DLH } &\$ 15.10\end{array}$ During 2019, Bluecap worked 28,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity") , to manufacture 9,000 units at a budgeted total of 27,000 DLHs.
The fixed overhead production volume variance for Bluecap Co. in 2019, to the nearest dollar, was:

• A) $11,280 favorable.
• B) $17,280 favorable.
• C) $28,800 unfavorable.
• D) $34,800 unfavorable.
• E) $51,840 favorable.

---

Definitions:

Sneezing

Sneezing is a reflex action to expel air forcefully from the nose and mouth to clear the nasal passages.

Spinal Reflex

An involuntary and nearly instantaneous movement in response to a stimulus, mediated by the spinal cord.

Sensory Neuron

A type of neuron that transmits signals from sensory receptors towards the central nervous system.

Motor Neuron

A type of neuron that carries signals from the central nervous system to muscles, effectively controlling voluntary and involuntary movements.