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Chong Corporation recently prepared a manufacturing cost budget for an output of 62,000 units, as follows: Direct materials$124,000Direct labor62,000Variable overhead93,000Fixed overhead124,000 Actual units produced amounted

Chong Corporation recently prepared a manufacturing cost budget for an output of 62,000 units, as follows:

Direct materials$124,000Direct labor62,000Variable overhead93,000Fixed overhead124,000

Actual units produced amounted to 72,000. Actual costs incurred were: direct materials, $126,000; direct labor, $72,000; variable overhead, $124,000; and fixed overhead, $119,500. If Chong evaluated performance by the use of a flexible budget, a performance report would reveal a total fixed variance of:

rev; 05_11_2012

Multiple Choice

  • $4,500 favorable.
  • $7,000 favorable.
  • $47,000 unfavorable.
  • $12,000 favorable.
  • None of the answers is correct.

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