The following data is given for the Bahia Company: Budgeted production 1,000 uni

Question

The following data is given for the Bahia Company:
Budgeted production 1,000 units
Actual production 980 units
Materials:
Standard price per pound $2.00
Standard pounds per completed unit 12
Actual pounds purchased and used in production 11,800
Actual price paid for materials $23,000
Labor:
Standard hourly labor rate $14 per hour
Standard hours allowed per completed unit 4.5
Actual labor hours worked 4,560
Actual total labor costs $62,928
Overhead:
Actual and budgeted fixed overhead $27,000
Standard variable overhead rate $3.50 per standard labor hour
Actual variable overhead costs $15,500
Overhead is applied on standard labor hours. The factory overhead volume variance is:
a. $65U
b. $540U
c. $540F
d. $65F

Explanation / Answer

c. $540F

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