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The standard factory overhead rate of Quaker Inc. is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead)
The standard factory overhead rate of Quaker Inc. is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:
Standard: | 25,000 hours at $10 | $250,000 |
Actual: | Variable factory overhead | 202,500 |
Fixed factory overhead | 60,000 |
What is the amount of the fixed factory overhead volume variance?
a.$12,500 unfavorable
b.$10,000 unfavorable
c.$10,000 favorable
d.$12,500 favorable
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