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Zero Company's standard factory overhead rate is $3.69 per direct labor hour (DLH), calculated at 88.00% capacity = 880 standard DLHs. In December, the company
Zero Company's standard factory overhead rate is $3.69 per direct labor hour (DLH), calculated at 88.00% capacity = 880 standard DLHs. In December, the company operated at 79.00% of capacity, or 790 standard DLHs. Budgeted factory overhead at 79.00% of capacity is $3,124, of which $1,357 is fixed overhead. For December, the actual factory overhead cost was $3,740 for 842 actual DLHs, of which $1,270 was for fixed factory overhead. | ||||||||||
Assuming the use of a four-way breakdown (decomposition) of the total overhead variance, what is the variable factory overhead efficiency variance for Zero Company in December? | ||||||||||
A) $139 unfavorable | ||||||||||
B) $116 unfavorable | ||||||||||
C) $755 unfavorable | ||||||||||
D) $587 unfavorable | ||||||||||
E) $87 favorable |
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