At Eady Corporation,maintenance Is a Variable Overhead Cost That Is

question 166

Multiple Choice

At Eady Corporation,maintenance is a variable overhead cost that is based on machine-hours.The performance report for July showed that actual maintenance costs totaled $8,650 and that the associated rate variance was $250 unfavorable.If 5,000 machine-hours were actually worked during July,the standard maintenance cost per machine-hour was:

• A) $1.73 per MH
• B) $1.78 per MH
• C) $1.68 per MH
• D) $1.83 per MH

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Definitions:

Net Method

Refers to an accounting practice of recording purchases or sales of inventory after all discounts have been applied, showing the net amount as the transaction value.

Purchases Discount

A deduction from the stated purchase price, often granted to encourage early payment or bulk buying.

Periodic Inventory System

A method that relies on occasional physical counts of inventory to determine the ending inventory balance and the cost of goods sold.