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) 21,000 Budgeted variable factory overhead cost at denominator volume $ 102,500 Total standard factory overhead rate per DLH $ 15.10 During 2019, Bluecap worked 27,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $13,000 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 9,000 units at a budgeted total of 27,000 DLHs. The total factory overhead spending variance in 2019 (to the nearest
whole dollar), based on a three-variance breakdown (decomposition) of the total overhead variance for Bluecap Co., was: (Round your intermediate calculation to
2 decimal places.)
Multiple Choice
$7,544 favorable.
$15,784 unfavorable.
$19,384 favorable.
$21,624 favorable.
$21,784 unfavorable.
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