Xero Company's Standard Factory Overhead Rate Is $3

question 6

Multiple Choice

Xero 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.What is the factory overhead production-volume variance for December?

• A)$0.
• B)$150 unfavorable.
• C)$225 favorable.
• D)$425 unfavorable.
• E)$650 unfavorable.

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