Able Control Company, Which Manufactures Electrical Switches, Uses a Standard

question 49

Multiple Choice

Able Control Company, which manufactures electrical switches, uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours (DLHs) . The standard overhead costs are shown below: *Based on 300,000 DLHs per month.

The following information is available for the month of October:

• Plans called for the production of 60,000 switches.
• 56,000 switches were actually produced.
• 275,000 direct labor-hours were worked at a total cost of $2,550,000.
• Actual variable manufacturing overhead costs were $2,340,000.
• Actual fixed manufacturing overhead costs were $3,750,000.
-The fixed manufacturing overhead budget variance for October was:

• A)$48,000 Unfavorable
• B)$150,000 Unfavorable
• C)$300,000 Favorable
• D)$390,000 Unfavorable

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