Lynn Company uses a standard cost system. Overhead is applied on the basis of direct labour hours (DLH), and the annual practical capacity of 42,000 DLH is used in establishing the standard overhead rates. The following summarizes budget and actual data for the past year:

 

During the year, 90,000 units were sold. There were no beginning or ending work-in-process inventories, but there were 3,000 units of finished goods on hand at the end of the year.The variable factory overhead flexible budget variance is which of the following?

a. $12,640 unfavourable

b. $ 4,560 unfavourable

c. $ 9,200 unfavourable

d. $11,040 unfavourable

e. $ 4,600 unfavourable

Transcribed Image Text:

Budget 100,000 Actual Units produced Direct materials (kg) 92,000 50,000 40,000 47,840 37,720 Direct labour hours (DLH) Production costs: $200,000 $500,000 $188,968 $471,500 $ 84,640 $162,000 Direct materials Direct labour $ 80,000 $160,000 Variable factory overhead Fixed factory overhead *applied