Question
Chong Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows: Direct materials $100,000 Direct labor 50,000 Variable overhead 75,000
Chong Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows:
Direct materials $100,000
Direct labor 50,000
Variable overhead 75,000
Fixed overhead 100,000
Actual units produced amounted to 60,000. Actual costs incurred were: direct materials, $110,000; direct labor, $60,000; variable overhead, $100,000; and fixed overhead, $97,000. If Chong evaluated performance by the use of a flexible budget, a performance report would reveal a total variance of:
A. $3,000 favorable.
B. $23,000 favorable.
C. $27,000 unfavorable.
D. $42,000 unfavorable.
E. None of the answers is correct.
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
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