Descamps Inc

question 41

Multiple Choice

Descamps Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July:
The variable overhead rate variance for the month is closest to:

• A) $78 F
• B) $84 F
• C) $78 U
• D) $84 U

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Definitions:

Uncollectibles

Debts owed to a company that are considered unlikely to be paid and are therefore written off as a loss.

Income Statement Approach

A method to prepare the bad debt expense by estimating uncollectible accounts at the end of each period based on expected losses.

Accounts Receivable

Represents the money owed to a company by its customers for goods or services delivered on credit.

Uncollectible Percentage

The estimated portion of accounts receivable that a company does not expect to collect.