The following information is for the standard and actual costs for the Happy Corporation: Enter favorable variances as negative numbers.
Standard Costs:
Budgeted units of production - 16,000 [80% (or normal) capacity]
Standard labor hours per unit - 4
Standard labor rate - $26 per hour
Standard material per unit - 8 lbs.
Standard material cost - $12 per pound
Standard variable overhead rate - $15 per labor hour
Budgeted fixed overhead - $640,000
Fixed overhead rate is based on budgeted labor hours at 80% (or normal) capacity.
Actual Cost:
Actual production - 16,500 units
Actual fixed overhead - $640,000
Actual variable overhead - $1,000,000
Actual labor - 65,000 hours, total labor costs $1,700,000
Actual material purchased and used - 130,000 lbs, total material cost $1,600,000
Actual variable overhead - $1,000,000
Determine the Quantity Variance
a. 24,000 unfavorable
b. 24,000 favorable
c. 12,000 unfavorable
d. 12,000 favorable