Question
Gerhan Company's flexible budget for the units actually manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity.
Gerhan Company's flexible budget for the units actually manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May, including $6,800 for fixed factory overhead. What is the factory overhead production-volume variance for Gerhan Company in May?
A. $180 unfavorable.
B.$380 unfavorable.
C.$680 unfavorable.
D.$860 unfavorable.
E.$1,360 unfavorable.
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Required solution Answer Correct answer is 1360 unfavorable Explanation At 70 capa...
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
16th edition
0077664078, 978-0077664077, 78111048, 978-0078111044
