Regent, Inc. uses the following standard to produce a single unit of its product: overhead $6 (2 hrs. @ $3/hr.). The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:
A) $16,000 unfavorable.
B) $36,000 unfavorable.
C) $12,000 favorable.
D) $10,000 favorable.
E) $4,000 unfavorable.

Question

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The Answer of Regent, Inc. uses the following standard to produce a single unit of its product: overhead $6 (2 hrs. @ $3/hr.). The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:
A) $16,000 unfavorable.
B) $36,000 unfavorable.
C) $12,000 favorable.
D) $10,000 favorable.
E) $4,000 unfavorable.