Xero Company's Standard Factory Overhead Rate Is $3

question 94

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.Assuming a four-variance breakdown (decomposition) of the total overhead variance,what is the fixed factory overhead efficiency variance for the period?

• A)N/A-this variance does not exist.
• B)$225 favorable.
• C)$425 unfavorable.
• D)$650 unfavorable.