The Standard Factory Overhead Rate Is $10 Per Direct Labor

question 117

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:
0 What is the amount of the factory overhead controllable variance?

• A) $10,000 favorable
• B) $2,500 unfavorable
• C) $10,000 unfavorable
• D) $2,500 favorable

---

Definitions:

Planning

The act of thinking about and organizing the activities required to achieve a desired goal.

Management Functions

Fundamental tasks of management, including planning, organizing, leading, and controlling, aimed at achieving business objectives.

21st Century Workplace

A modern work environment characterized by technological advancements, diversity, flexible working conditions, and innovative organizational structures.

Challenges

are difficulties and obstacles that need to be overcome in order to achieve a goal or complete a task.