Zero Company's Standard Factory Overhead Rate Is $3

question 10

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.

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

• A) $90 unfavorable.
• B) $150 unfavorable.
• C) $225 favorable.
• D) $425 unfavorable.
• E) $650 unfavorable.

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Definitions:

Workplace Spirituality

A framework within organizations that promotes employees' sense of purpose through work, respects their inner lives, and integrates their core values and beliefs into the workplace.

Ecological Fallacy

The error of making inferences about individuals based solely on aggregate data collected at the group level.

Meaningful Work

Employment perceived as having significance and purpose, contributing positively to the individual and society.

Workplace Spirituality

A framework where individuals connect to their inner selves while embracing their work tasks with a sense of purpose and meaning.