Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010:
During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The total overhead variance in 2010 is:
A)$14,000 unfavorable.
B)$15,040 favorable.
C)$17,280 favorable.
D)$37,840 favorable.
E)$37,840 unfavorable.

Question

Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010: 
During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The total overhead variance in 2010 is:
A)$14,000 unfavorable. 
B)$15,040 favorable. 
C)$17,280 favorable. 
D)$37,840 favorable. 
E)$37,840 unfavorable.

Quizplus · Accepted Answer

The Answer of Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010: 
During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The total overhead variance in 2010 is:
A)$14,000 unfavorable. 
B)$15,040 favorable. 
C)$17,280 favorable. 
D)$37,840 favorable. 
E)$37,840 unfavorable.