The Standard Factory Overhead Rate Is $7 What Is the Amount of the Variable Factory Overhead Controllable

question 134

Multiple Choice

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: $\begin{array}{lll}\$ 360,000 & \text { Variable factory overhe ad } & \text { Actual } \\104,000 & \text { Fixed factory overhead } & \\450,000 & 60,000 \text { hours at } \$ 7.50 &\text { Standard } \end{array}$ What is the amount of the variable factory overhead controllable variance?

• A) $12,000 unfavorable
• B) $12,000 favorable
• C) $14,000 unfavorable
• D) $26,000 unfavorable

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