Point Company Uses the Standard Costing Method

question 17

Multiple Choice

Point Company uses the standard costing method. The company's main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year were $6,750. During the year, the company produced and sold 8,000 units. Actual fixed overhead costs were $4,800. Compute the fixed overhead variance.

• A) $300 (F)
• B) $300 (U)
• C) $1,950 (U)
• D) $2,250 (U)

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Definitions:

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