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Question
Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance.
| Direct labor standard (2 hrs. @ $13/hr.) | $26.00 per finished unit |
| Actual direct labor hours | 81,000 hrs. |
| Budgeted units | 42,000 units |
| Actual finished units produced | 40,000 units |
| Standard variable OH rate (2 hrs. @ $14.30/hr.) | $28.60 per finished unit |
| Standard fixed OH rate ($336,000/42,000 units) | $8.00 per unit |
| Actual cost of variable overhead costs incurred | $1,140,000 |
| Actual cost of fixed overhead costs incurred | $ 338,000 |
A. $18,000 favorable.
B. $4,000 favorable.
C. $18,000 unfavorable.
D. $18,300 favorable.
E. $14,300 unfavorable.
Answer
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Related questions
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