The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the total factory overhead cost variance is
A) $2,000 favorable
B) $5,000 unfavorable
C) $2,500 unfavorable
D) $5,000 favorable

Question

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:  The amount of the total factory overhead cost variance is
A) $2,000 favorable 
B) $5,000 unfavorable 
C) $2,500 unfavorable 
D) $5,000 favorable

Quizplus · Accepted Answer

The total standard cost of factory overhead for the production of 2,500 units is $25,000 (10,000/400*2,500). The actual cost of factory overhead for the production of 2,500 units is $30,000. Therefore, the total factory overhead cost variance is $5,000 unfavorable ($30,000 - $25,000).

The Standard Costs and Actual Costs for Factory Overhead for the Manufacture