Fletcher Company Collected the Following Data Regarding Production of One

question 215

Multiple Choice

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance. $\begin{array}{lrl}\text { Direct labor standard (2 hrs. @ } \$ 12.75 / \mathrm{hr} .) & \$ 25.50& \text { per finished unit} \\\text { Actual direct labor hours } & 81,500& \text { hrs.} \\\text { Budgeted units } & 42,000& \text { units} \\\text { Actual finished units produced } & 40,000 & \text { units}\\\text { Standard variable OH rate }(2 \mathrm{hrs} . @ \$ 14.30 / \mathrm{hr} .) & \$ 28.60& \text { per finished unit} \\\text { Standard fixed OH rate }(\$ 336,000 / 42,000 \text { units) } & \$ 8.00 & \text { per unit}\\\text { Actual cost of variable overhead costs incurred } & \$ 1,140,000 \\\text { Actual cost of fixed overhead costs incurred } & \$ 338,000\end{array}$

• A) $18,000 favorable.
• B) $4,000 favorable.
• C) $18,000 unfavorable.
• D) $18,300 favorable.
• E) $14,300 unfavorable.

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