Adams, Inc

Multiple Choice

Adams, Inc. uses the following standard to produce a single unit of its product: overhead (2 hrs. @ $3/hr.) $6. The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:

A) $10,000 favorable.
B) $12,000 favorable.
C) $4,000 unfavorable.
D) $16,000 unfavorable.
E) $36,000 unfavorable.