The Maxit Corporation Has a Standard Costing System in Which $\bullet$

question 117

Multiple Choice

The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: $\bullet$ Actual variable manufacturing overhead cost incurred: $11,310
$\bullet$ Actual machine-hours worked: 1,600 hours
$\bullet$ Variable overhead rate variance: $1,710 U
$\bullet$ Total variable overhead spending variance: $2,310 U
The standard number of machine-hours allowed for July production is closest to:

• A) 1,600 hours
• B) 1,700 hours
• C) 1,300 hours
• D) 1,500 hours

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Definitions:

Direct Materials

Raw materials that can be directly identified and easily traced to the manufacturing of a product.

Indirect Material

Materials used in the support of the production process but not directly a part of the finished product.

Period Cost

Costs that are expensed in the period in which they are incurred, not directly tied to the production of goods or services.

Goals Met

A term indicating the achievement of predefined objectives or targets.