The Standard Factory Overhead Rate of Quaker Inc Refer to the Information Provided for Quaker Inc

question 61

Multiple Choice

The standard factory overhead rate of Quaker Inc. 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: $\begin{array}{lll}\$ 250,000 & 25,000 \text { hours at } \$ 10 & \text { Standard } \\202,500 & \text { Variable factory overhead } & \text { Actual: } \\60,000 & \text { Fixed factory overhead } &\end{array}$ Refer to the information provided for Quaker Inc. What is the amount of the variable factory overhead controllable variance?

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

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