Standard Corporation Has Developed Standard Manufacturing Overhead Costs Based on a Capacity

question 109

Multiple Choice

Standard Corporation has developed standard manufacturing overhead costs based on a capacity of 180,000 direct labor-hours (DLHs) as follows: Standard overhead costs per unit:
Variable portion: 2 DLHs × $3 per DLH = $6
Fixed portion: 2 DLHs × $5 per DLH = $10
The following data pertain to operations in April:
The fixed manufacturing overhead budget variance for April was:

• A) $40,000 Unfavorable
• B) $40,000 Favorable
• C) $60,000 Favorable
• D) $60,000 Unfavorable

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Definitions:

Probability

An assessment of the chance of an event taking place, denoted by a number from 0 to 1, with 0 signifying that the event is not possible and 1 signifying that the event is guaranteed to happen.

Event Occurs

A term indicating the point in time or space at which an event takes place.

Independent

In statistics, refers to variables or events that are not influenced or caused by other variables within the scope of a study.

Dependent

A variable in an experiment or study that is expected to change in response to changes in another variable called the independent variable.