Cima C01 Exam Question No 30

Question No 30:

P operates a standard marginal costing system. The following budgeted and standard cost information is available:

Budgeted production and sales                               10,000 units
Variable production overheads – 5 hours x $4 $    20 per unit

Actual results for the period were as follows:

Production and sales                                                11,500 units
Variable production overheads – 52,000 hours      $195,000

The variable production overhead expenditure variance is

A. $35,000 adverse
B. $13,000 adverse
C. $13,000 favourable
D. $35,000 favourable

Answer: C