Question
The data below relate to the month of April for Monroe, Inc., which uses a standard cost system and a two-variance analysis of factory overhead:
The data below relate to the month of April for Monroe, Inc., which uses a standard cost system and a two-variance analysis of factory overhead:
Actual direct labor hours used | 16,500 |
Standard direct labor hours allowed | 16,250 |
Actual total factory overhead | $53,200 |
Budgeted fixed factory overhead | $12,000 |
Budgeted activity in hours | 16,000 |
Total overhead application rate per standard direct labor hour | $3.25 |
Variable overhead application rate per standard direct labor hour | $2.50 |
What was Monroe's production-volume variance for April?
a. | $187.50 favorable |
b. | $187.50 unfavorable |
c. | $437.50 favorable |
d. | $437.50 unfavorable |
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