Exhibit 10-1
Flatland Company Applies Fixed Manufacturing Overhead Costs to Products

question 28

Multiple Choice

Exhibit 10-1
Flatland Company applies fixed manufacturing overhead costs to products based on direct labor hours.Information for the month of April appears below.Flatland expects to produce and sell 18,000 units for the month.
Below is budget information for Flatland Company.
$$\begin{array} { l l } \text { Budgeted fixed overhead costs } & \$ 270,000 \\\text { Budgeted direct labor hours } & 90,000 \text { hours } \\\text { Standard direct labor hours per unit } & 5 \text { hours per unit } \\\text { Actual production } & 17,000 \\\text { Actual fixed overhead costs } & \$ 280,000\end{array}$$
-Refer to Exhibit 10-1.Based on this information,what is the fixed overhead production volume variance?

• A)$15,000 unfavorable
• B)$10,000 favorable
• C)$15,000 favorable
• D)$10,000 unfavorable
• E)None of the answer choices is correct.

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Definitions:

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