Venus Company Applies Overhead Based on Direct Labor Hours

question 13

Multiple Choice

Venus Company applies overhead based on direct labor hours.The variable overhead standard is 10 hours at $3.50 per hour.During October,Venus Company spent $157,600 for variable overhead.47,440 labor hours were used to produce 4,800 units.What is the over- or underapplied variable overhead?

• A)$10,400 overapplied
• B)$8,440 overapplied
• C)$8,440 underapplied
• D)$1,960 overapplied

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Definitions:

Informationally Efficient

The concept where a market is said to be informationally efficient if all relevant information is fully and immediately reflected in a security's market price.

Allocationally Efficient

Refers to a market scenario where resources are distributed in a way that maximizes the benefits to all participants, considering their preferences and needs.

Random Walk

A theory suggesting that stock market prices evolve according to a random path, making it impossible to consistently predict future movements based on past trends.

Stock Price Changes

Variations in the market price of a company’s stock over time.