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Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 CDs for which the standard cost for each CD is:
Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 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 ($0.70 fixed and $0.90 variable) | 1.60 |
Total | $4.30 |
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 2021:
Actual production | 112,000 CDs |
Actual variable overhead | $91,000 |
Actual fixed overhead | $85,500 |
How much is the controllable overhead variance for 2021?
a) | $4,400 favorable | |
b) | $1,300 favorable | |
c) | $1,600 favorable | |
d) | $5,000 favorable | |
e) | $1,800 favorable |
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