The Standard Factory Overhead Rate Is $10 Per Direct Labor

question 54

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 controllable variance?

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

---

Definitions:

Japan Invaded China

This refers to several instances of military incursions by Japan into China, most notably the Second Sino-Japanese War (1937-1945), which was part of the broader conflict of World War II.

1930s

The decade from 1930 to 1939, marked globally by the Great Depression, economic challenges, and the lead-up to World War II.

Germany Invaded Poland

The event on September 1, 1939, marking the beginning of World War II, when Nazi Germany initiated an attack on Poland, leading to the swift involvement of other nations.

Declare War

The formal act by which a sovereign nation announces and initiates a state of war against another sovereign nation.