Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000
Actual machine hours worked: 24,000
Variable overhead incurred: $50,000
Fixed overhead incurred: $250,000
The variable-overhead spending and efficiency variances for Theory are:
Fixed overhead Budget Fixed overhead volume variance
variance
A. $ 0 $ 10,000 favorable
B. $ 10,000 favorable $ 0
C. $ 10,000 favorable $ 10,000 unfavorable
D. $ 10,000 un favorable
E. $ 10,000 unfavorable $ 10,000 favorable
i. Choice A
ii. Choice B
iii. Choice C
iv. Choice D
v. Choice E