Rumington Popcorn uses a standard cost system and applies overhead on a per unit basis. The company
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Question:
Rumington Popcorn uses a standard cost system and applies overhead on a per unit basis. The company estimated that 40,000 units would be produced in 2020 and uses this quantity to establish its standard overhead cost per unit. The cost formula for overhead costs used to develop the standard overhead cost per unit was:
Overhead = $120,000 + $6 per unit
During the year, actual overhead cost was $340,000. Actual units produced were 39,000. How much is the overhead volume variance for 2020?
A. $3,250 unfavorable
B. $3,850 unfavorable
C. $4,000 unfavorable
D. $3,000 unfavorable
E. $2,700 unfavorable
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