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:

Diversity of Citizenship

A legal principle allowing federal courts to hear cases where the parties are citizens of different states or countries, aiming to prevent state court bias.

Principal Place of Business

The primary location where a corporation's executives direct, control, and coordinate the business activities.

Incorporated

The process by which a business is legally declared a corporate entity, separate and distinct from its owners, with its own rights and liabilities.

In Personam Jurisdiction

The legal authority of a court to require a person to appear before it and to subject that person to its decisions.