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A static overhead budget based on 40,000 direct labor hours shows Factory Insurance $6,500 as a...

A static overhead budget based on 40,000 direct labor hours shows Factory Insurance $6,500 as a fi xed cost. At the 50,000 direct labor hours worked in March, factory insurance costs were $6,300. Is this a favorable or unfavorable performance? Why?

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The performance is favorable BECAUSE factory insurance is a fixed cost and will not change regardless of the direct labor hours. So, the factory insurance is $200 under budget

ekkarill92 answered 2 years ago
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