A Manufacturing Company That Has Only One Product Has Established

question 78

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 efficiency variance for the month?

• A) $11,076 U
• B) $11,037 F
• C) $11,037 U
• D) $216 U

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Definitions:

Diesel Engine

An internal combustion engine in which air is compressed to a high degree to ignite diesel fuel injected into the cylinder, used in most heavy-duty vehicles.

Activity-Based Costing

A methodology in accounting that assigns costs to products or services based on the activities and resources that are consumed in the process of providing them.

Single Plantwide Overhead Rate

A method of applying overhead to products in which support department costs are combined with all other overhead costs, and the total overhead cost is then applied to the products using a single cost driver.

Multiple Production Department Rates

Costing rates used for different departments within a production process, reflecting the varying costs associated with each department.