Reference no: EM132725105

Munoz Manufacturing Co. normally produces 12,000 units of product X each month. Each unit requires 2.5 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are $3.00 and $2.00 per direct labor hour, respectively.

Cost and production data for May follow:

Production for the month 11,000

UNITS Direct labor hours used 22,500 HOURS

Factory overhead incurred for:

Variable costs $33,000

Fixed costs $60,500

Problem a. Calculate the flexible-budget variance.

Problem b. Calculate the production-volume variance.

Problem c. Was the total factory overhead under- or overapplied? By what amount?