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15 November, 22:30

Given the following information for Albright Company, what was the factory overhead cost variance?

Manufacturing Costs - Actual Costs - Standard Cost at Actual Volume - Budgeted Cost

Direct materials - $80,300 - $ 76,000 - $ 71,250

Direct labor - 77,000 - 72,500 - 68,400

Factory overhead - 44,800 - 48,000 - 45,600

Total - $202,100 - $196,500 - $185,250

a. $3,200 unfavorableb. $5,600 unfavorablec. $16,850 unfavorabled. $ (5,600) favorable

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Answers (1)
  1. 15 November, 23:51
    0
    The correct answer is option (b) unfavorable

    Explanation:

    From the question given

    We solve for the factory overhead cost variance to know whether it is favorable or unfavorable.

    Solution

    The Total cost variance for manufacturing = Standard Cost at Actual Volume - Actual costs

    Thus,

    = 196,500-202,100

    = $5,600 unfavorable

    Therefore the overhead cost of variance is = $5,600 which is unfavorable

    Correct option is b.
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