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 volume variance?
A) $12,500 favorable
B) $10,000 unfavorable
C) $12,500 unfavorable
D) $10,000 favorable

Question

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 volume variance?
A) $12,500 favorable 
B) $10,000 unfavorable 
C) $12,500 unfavorable 
D) $10,000 favorable

Quizplus · Accepted Answer

The Answer of 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 volume variance?
A) $12,500 favorable 
B) $10,000 unfavorable 
C) $12,500 unfavorable 
D) $10,000 favorable

The Standard Factory Overhead Rate Is $10 Per Direct Labor