Kartman Corporation Makes a Product with the Following Standard Costs

question 86

Multiple Choice

Kartman Corporation makes a product with the following standard costs: In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for June is:

• A) $760 F
• B) $760 U
• C) $741 F
• D) $741 U

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Definitions:

Performance Rating

An assessment or evaluation of an individual’s or group's work performance, usually based on established criteria and objectives.

Normal Time

The amount of time that a task should take under normal conditions, often used in the context of planning and scheduling.

Standard Time

The predetermined duration expected to finish a certain task or job under usual working circumstances.

Variable Allowance

Refers to the additional time factored into tasks or jobs to account for various unpredictable factors that could affect the time required to complete a task.