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: What is the amount of the factory overhead volume variance?
A) $12,000 unfavorable
B) $12,000 favorable
C) $14,000 unfavorable
D) $26,000 unfavorable

Question

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:  What is the amount of the factory overhead volume variance?
A) $12,000 unfavorable 
B) $12,000 favorable 
C) $14,000 unfavorable 
D) $26,000 unfavorable

Quizplus · Accepted Answer

The Answer of 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:  What is the amount of the factory overhead volume variance?
A) $12,000 unfavorable 
B) $12,000 favorable 
C) $14,000 unfavorable 
D) $26,000 unfavorable

The Standard Factory Overhead Rate Is $7