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Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following...

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Accounting

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:

Denominator volumenumber of units 7,000
Denominator volumepercent of capacity 70 %
Denominator volumestandard direct labor hours (DLHs) 42,000
Budgeted variable factory overhead cost at denominator volume $ 102,200
Total standard factory overhead rate per DLH $ 15.10

During 2019, Bluecap worked 53,000 DLHs and manufactured 9,300 units. The actual factory overhead cost for the year was $11,000 greater than the flexible budget amount for the units produced, of which $7,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 8,700 units at a budgeted total of 26,100 DLHs. The total overhead variance in 2019 for Bluecap Co., to the nearest whole dollar, was: (Round your intermediate calculation to 2 decimal places.)

Multiple Choice

  • $11,000 unfavorable.

  • $141,046 favorable.

  • $143,286 favorable.

  • $163,846 favorable.

  • $163,846 unfavorable.

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