At the denominator activity level,Norland Company's total overhead budget for 25,000 units of production shows variable overhead costs of $36,000 and fixed overhead costs of $32,000.During the most recent period,the company incurred total overhead costs of $61,400 to manufacture 20,000 units.The total factory overhead variance is:
A)$200 favorable.
B)$600 unfavorable.
C)$6,000 unfavorable.
D)$6,600 favorable.
E)$7,000 unfavorable.

Question

Quizplus · Accepted Answer

The budgeted overhead for 20,000 units is $28,800 variable ($36,000/25,000 units * 20,000 units) plus $32,000 fixed, totaling $60,800. The actual overhead was $61,400, resulting in a $600 unfavorable variance.

At the Denominator Activity Level,Norland Company's Total Overhead Budget for 25,000