Question
Steep, Inc. budgeted 6,000 cup holders for March. Each holder is sold for $12. Actual production for March was 6,300 cup holders. Manufacturing overhead is
Steep, Inc. budgeted 6,000 cup holders for March. Each holder is sold for $12. Actual production for March was 6,300 cup holders. Manufacturing overhead is applied based on units produced. Standards and actual costs follow for March:
Standards
Actual
Materials
1.1 pounds @ $2.40 a pound
6,400 pounds purchased for $15,040;
6,450 pounds used
Labor
0.10 hours @ $14.00 per hour
620 hours @ $14.30 per hour
Variable overhead
$16,800
$18,400
Fixed overhead
$6,900
$10,300
How much is the controllable overhead variance?
a)$1,460 unfavorable
b)$4,160 unfavorable
c)$2,300 unfavorable
d)$980 favorable
e)$480 favorable
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