A Manufacturing Company That Has Only One Product Has Established

question 49

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. The following data pertain to operations for the last month:
What is the variable overhead rate variance for the month?

• A) $10,821 U
• B) $255 U
• C) $10,821 F
• D) $255 F

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Definitions:

Direct Materials

The cost of raw materials that can be directly traced to the production process.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected standard cost, which can indicate changes in material costs over time.

Particular Product

A specific item produced by a company, distinguished by its unique characteristics, as opposed to a general category of products.

Last Month

Refers to the period of time immediately preceding the current month.