The Standard Fixed Factory Overhead Rate Is Based on 100 $\begin{array}{ll}\$ 950,000 & \text { Actual: Factory overhead } \\900,000 & \text { Standard: } 100,000 \text { hours at } \$ 9.00\end{array}$

question 22

Multiple Choice

The standard fixed factory overhead rate is based on 100% capacity of 120,000 machine hours for Thompson Inc. The standard costs and the actual costs of factory overhead for the production of 25,000 units during March were as follows: $\begin{array}{ll}\$ 950,000 & \text { Actual: Factory overhead } \\900,000 & \text { Standard: } 100,000 \text { hours at } \$ 9.00\end{array}$
If there was a $60,000 unfavorable volume variance for March, what is the standard fixed factory overhead cost rate?

• A) $3.00
• B) $2.50
• C) $6.67
• D) $0.60

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