Venus Company Applies Overhead Based on Direct Labor Hours

question 11

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 variable overhead efficiency variance?

• A)$8,440 favorable
• B)$1,960 favorable
• C)$10,400 favorable
• D)$1,960 unfavorable

---

Definitions:

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to dividends and voting rights.

Stockholders' Equity

The equity stake that shareholders have in a company, representing their ownership interest, which is calculated as total assets minus total liabilities.

Common Shares

Common shares represent units of ownership in a company, giving shareholders voting rights and a portion of the profits through dividends, subject to corporate performance.

Accrued Interest Expense

Interest expense that has been incurred but not yet paid during an accounting period.