Question
Eminem, Inc. manufactures music CDs. At the start of 2020, Eminem planned to produce 112,000 CDs for which the standard cost for each CD is:
Eminem, Inc. manufactures music CDs. At the start of 2020, Eminem planned to produce 112,000 CDs for which the standard cost for each CD is: Plastic (0.25 pounds at $6.00 per pound) $1.50 Labor (0.10 hour at $12.00 per hour) 1.20 Overhead ($0.60 fixed and $0.90 variable) 1.50 Total $4.20 Overhead is allocated based on the number of units produced. Eminem isolates material purchase variances at the point of purchase. The following information summarizes Eminems results for 2020: Actual production 111,000 CDs Actual variable overhead $64,000 Actual fixed overhead $83,000 How much is the overhead volume variance for 2020?
a) $600 unfavorable
b) $1,200 unfavorable
c) $600 favorable
d) $1,200 favorable
e) $1,500 favorable
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