The Standard Factory Overhead Rate Is $10 Per Direct Labor

question 134

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:

Vascular Bundle

Multistranded bundle of xylem, phloem, and sclerenchyma fibers running through a stem or leaf.

Endodermal

Relating to the innermost layer of the three primary germ layers in the embryo, giving rise to the gastrointestinal tract, liver, and lungs.

Mesophyll

Photosynthetic parenchyma of plants.

Sieve Tubes

A series of sieve tube elements placed end to end to form channels for nutrient transport in plants.