Nexus Industries Uses a Standard Costing System to Apply Manufacturing

question 114

Multiple Choice

Nexus Industries uses a standard costing system to apply manufacturing costs to its production process. In May, Nexus anticipated producing 2700 units with fixed manufacturing overhead costs allocated at $8.40 per direct labor hour with a standard of 2.5 direct labor hours per unit. In May, actual production was 3400 units and actual fixed manufacturing overhead costs were $23,000. What was Nexus' fixed manufacturing overhead volume variance in May?

• A)$33,700 favorable
• B)$33,700 unfavorable
• C)$14,700 favorable
• D)$14,700 unfavorable

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