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The Following Data Is Given for the Walker Company Overhead Is Applied on Standard Labor Hours

Question 166

Multiple Choice

The following data is given for the Walker Company:  Budgeted production 1,000 units  Actual production 980 units  Materials:  Standard price per lb $2.00 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor:  Standard hourly labor rate $14 per hour  Standard hours allowed per completed unit 4.5 Actual labor hours worked 4,560 Actual total labor costs $62,928 Overhead:  Actual and budgeted fixed overhead $27,000 Standard variable overhead rate $3.50 per standard labor hour  Actual variable overhead costs $15,500\begin{array}{ll}\text { Budgeted production } & 1,000 \text { units } \\\text { Actual production } & 980 \text { units }\\\text { Materials: }\\\text { Standard price per lb } & \$ 2.00 \\\text { Standard pounds per completed unit } & 12 \\\text { Actual pounds purchased and used in production } & 11,800 \\\text { Actual price paid for materials } & \$ 23,000\\\text { Labor: }\\\text { Standard hourly labor rate } & \$ 14 \text { per hour } \\\text { Standard hours allowed per completed unit } & 4.5 \\\text { Actual labor hours worked } & 4,560 \\\text { Actual total labor costs } & \$ 62,928\\\text { Overhead: }\\\text { Actual and budgeted fixed overhead }&\$27,000\\\text { Standard variable overhead rate }&\$ 3.50 \text { per standard labor hour }\\\text { Actual variable overhead costs }&\$15,500\end{array} Overhead is applied on standard labor hours. ?
The factory overhead volume variance is:


A) $65 unfavorable.
B) $65 favorable.
C) $540 unfavorable.
D) $540 favorable.

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