Formidable Company Collected the Following Information: Standard Costs Per Unit

question 7

Multiple Choice

Formidable Company collected the following information: Standard costs per unit:
Variable overhead 4 machine hours @ $6 per machine hour
Fixed overhead 4 machine hours @ $10 per machine hour
Actual output 20,000 units
Denominator (normal capacity) output 21,000 units
Actual machine hours 79,000 machine hours
Actual variable overhead cost $540,000
Actual fixed overhead cost $810,000
Using the two variance method, what is the total variance?

• A) $30,000 (U)
• B) $70,000 (U)
• C) $70,000 (F)
• D) $30,000 (F)

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Definitions:

Pumice

A light, porous volcanic rock formed from explosive eruptions, known for its ability to float on water.

Welded Tuff

A type of rock formed from volcanic ash ejected during an eruption, which then falls and welds together under high temperature and pressure.

Feldspar

A group of rock-forming silicate minerals that make up a significant portion of the Earth's crust, commonly found in igneous, metamorphic, and sedimentary rocks.

Quartz

A hard, crystalline mineral composed of silicon dioxide (SiO2), widely used in jewelry and as an industrial abrasive.