The Landrum Company provides the following standard cost data per unit of product: Landrum anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs.The variable overhead flexible budget variance was:
$$\begin{array} { | l | l | }
\hline \text { Variable overhead } & \$ 8.00\\hline
\end{array}$$
A)$8,000 unfavorable.
B)$10,000 unfavorable.
C)$8,000 favorable.
D)$10,000 favorable.

Question

The Landrum Company provides the following standard cost data per unit of product: Landrum anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs.The variable overhead flexible budget variance was:
$$\begin{array} { | l | l | } 
\hline \text { Variable overhead } & \$ 8.00\\hline
\end{array}$$
A)$8,000 unfavorable.
B)$10,000 unfavorable.
C)$8,000 favorable.
D)$10,000 favorable.

Quizplus · Accepted Answer

The flexible budget for variable overhead is based on actual production. The standard cost is $8.00 per unit, so for 25,000 units, the budgeted cost is $200,000. The actual cost was $210,000, resulting in a $10,000 unfavorable variance.

The Landrum Company Provides the Following Standard Cost Data Per Variable overhead $8.00\begin{array} { | l | l | } \hline \text { Variable overhead } & \$ 8.00\\\hline\end{array} Variable overhead ​$8.00​​

The Landrum Company Provides the Following Standard Cost Data Per $\begin{array} { | l | l | } \hline \text { Variable overhead } & \$ 8.00\\\hline\end{array}$