The Following Standards for Variable Manufacturing Overhead Have Been Established

question 46

Multiple Choice

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month:
What is the variable overhead efficiency variance for the month?

• A) $7,600 F
• B) $2,835 F
• C) $7,600 U
• D) $7,425 U

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Definitions:

Current Cost

Current cost refers to the cost of purchasing an asset or replacing a liability at current market rates, as opposed to historical purchase prices.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used to assess the value of future cash flows in today's dollars.