Hyteck Ltd Is a Capital Intensive Firm

Multiple Choice

Hyteck Ltd is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. The fixed overhead production volume variance was

A) $9,000 U
B) $2,000 F
C) $7,000 U
D) $2,800 U