# Question: The normal capacity of a factory is 8 000 units per

The normal capacity of a factory is 8,000 units per month. Cost and production data follow:
Standard application rate for fixed overhead . . . . . . . . . . . . ... \$0.50 per unit
Standard application rate for variable overhead . . . . . . . . .... \$1.50 per unit
Production–Month 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200 units
Production–Month 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 units
Actual factory overhead–Month 1. . . . . . . . . . . . . . . . . . . . . . . . . ... \$ 14,700
Actual factory overhead–Month 2. . . . . . . . . . . . . . . . . . . . . . . . .. \$ 17,400
Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month. The normal capacity of a factory is 10,000 units per month. Cost and production data follow:

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