Question

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of...

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:

Standard Costs
Fixed overhead (based on 10,000 hours) 3 hours per unit @ $0.75 per hour
Variable overhead 3 hours per unit @ $1.97 per hour

Actual Costs
    Total variable cost, $17,900
    Total fixed cost, $8,000

The amount of the total factory overhead cost variance is

a.$5,000 favorable

b.$5,000 unfavorable

c.$3,125 unfavorable

d.$6,875 favorable

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