The Standard Factory Overhead Rate Is $10 Per Direct Labor

question 37

Multiple Choice

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:
What is the amount of the factory overhead volume variance?

• A) $12,500 favorable
• B) $10,000 unfavorable
• C) $12,500 unfavorable
• D) $10,000 favorable

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Definitions:

Gesture-Call System

A form of nonverbal communication involving bodily motions and vocal sounds used to convey messages, commonly observed in animals and early human development.

Sapir-Whorf Hypothesis

A theory in linguistics that suggests that the structure of a language influences its speakers' worldview or cognition, and thus people's perceptions are relative to their spoken language.

Chomskian Linguistics

A branch of theoretical linguistics founded by Noam Chomsky, focusing on the inherent structures of language and the cognitive capacities necessary for language acquisition.