1.

The following information for the past year is available from Thinnews Co., a company that uses machine hours to apply standard factory overhead cost to outputs:

Actual total factory overhead cost incurred	$28,000
Actual fixed overhead cost incurred	$11,000
Budgeted fixed overhead cost	$10,000
Actual machine hours	5,380
Standard machine hours allowed for the units manufactured	5,050
Denominator volume-machine hours	5,750
Standard variable overhead rate per machine hour	$3.00

Under a three-variance breakdown (decomposition) of the total factory overhead variance, the factory overhead efficiency variance (to the nearest whole dollar) is:

a: $1,790 unfavorable

b: $1,790 favorable

c: $990 unfavorable

d: $790 favorable.

e: $2,390 favorable.

2.

Neptune Inc. uses a standard cost system and has the following information for the most recent month, April:

Actual direct labor hours (DLHs) worked	12,000
Standard DLHs allowed for good output produced this period	13,000
Actual total factory overhead costs incurred	$32,700
Budgeted fixed factory overhead costs	$11,100
Denominator activity level, in direct labor hours (DLHs)	11,000
Total factory overhead application rate per standard DLH	$2.70

The total factory overhead flexible-budget variance in April for Neptune, Inc., to the nearest whole dollar, was:

a: $270 unfavorable.

b: $1,490 favorable.

c: $370 favorable.

d: $1,310 favorable.