Question
39. Will rate Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: Denominator volumenumber
39. Will rate
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:
Denominator volumenumber of units | 6,000 | ||
Denominator volumepercent of capacity | 60 | % | |
Denominator volumestandard direct labor hours (DLHs) | 18,000 | ||
Budgeted variable factory overhead cost at denominator volume | $ | 102,100 | |
Total standard factory overhead rate per DLH | $ | 15.10 | |
During 2019, Bluecap worked 26,000 DLHs and manufactured 9,100 units. The actual factory overhead cost for the year was $17,000 greater than the flexible budget amount for the units produced, of which $7,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 8,500 units at a budgeted total of 25,500 DLHs. The total overhead variance in 2019 for Bluecap Co., to the nearest whole dollar, was: (Round your intermediate calculation to 2 decimal places.)
Multiple Choice
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$17,000 unfavorable.
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$47,899 favorable.
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$50,139 favorable.
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$70,699 favorable.
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$70,699 unfavorable.
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