Zero Company\'s standard factory overhead rate is $3.47 per direct labor hour (D
ID: 2469461 • Letter: Z
Question
Zero Company's standard factory overhead rate is $3.47 per direct labor hour (DLH), calculated at 83.00% capacity = 830 standard DLHs. In December, the company operated at 73.00% of capacity, or 730 standard DLHs. Budgeted factory overhead at 73.00% of capacity is $2,902, of which $1,259 is fixed overhead. For December, the actual factory overhead cost was $3,570 for 784 actual DLHs, of which $1,220 was for fixed factory overhead. What is the factory overhead production volume variance for Zero Company in December? $39 favorable $152 favorable $585 unfavorable $152 unfavorable $39 unfavorable Zero Company's standard factory overhead rate is $3.47 per direct labor hour (DLH), calculated at 83.00% capacity = 830 standard DLHs. In December, the company operated at 73.00% of capacity, or 730 standard DLHs. Budgeted factory overhead at 73.00% of capacity is $2,902, of which $1,259 is fixed overhead. For December, the actual factory overhead cost was $3,570 for 784 actual DLHs, of which $1,220 was for fixed factory overhead. What is the factory overhead production volume variance for Zero Company in December? $39 favorable $152 favorable $585 unfavorable $152 unfavorable $39 unfavorableExplanation / Answer
Answer:
Budgeted Fixed Overhead = $ 1259
Actual Fixed Overhead Absorbed = $ 1220
Factory Overhead Production Volume Variance = Favourable $ 39. The Correct answer is $ 39 favourable.
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