If Overhead Is Applied to Production Using Direct Labor Hours

question 12

Multiple Choice

If overhead is applied to production using direct labor hours and the direct labor efficiency variance is favorable,then the variable overhead efficiency variance is

• A)favorable.
• B)unfavorable.
• C)either favorable or unfavorable.
• D)neither favorable not unfavorable.

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Definitions:

Interest Payment

The amount paid by a borrower to a lender as compensation for the use of borrowed money, often expressed as a percentage of the principal.

Interest Rate

The lending charge, expressed as a fraction of the original amount, that a borrower is assessed by a lender for asset use.

Annuity Due

A type of annuity payment where payments are made at the beginning of each period, as opposed to the end.

Cash Flows

The sum totality of cash transitions in and out of a commercial operation, markedly influencing its financial fluidity.