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% of normal 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:
-The fixed factory overhead volume variance is
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% of normal 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:  ​
-The fixed factory overhead volume variance is
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% of normal 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:  ​
-The fixed factory overhead volume variance is
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