The Standard Fixed Factory Overhead Rate Is Based on 100

The standard fixed factory overhead rate is based on 100% capacity of 135,000 machine hours for Interile Inc.The standard costs and the actual costs of factory overhead for the production of 32,000 units during March were as follows: $$\begin{array} { l r } \text { Actual: Factory overhead } & \$ 860,000 \\\text { Standard: } 100,000 \text { hours at } \$ 8.00 & 800,000\end{array}$$ ? If there was a $70,000 unfavorable volume variance for March, what is the standard fixed factory overhead cost rate?

A) $2.00
B) $2.50
C) $3.00
D) $3.50

Correct Answer:

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