Whittenton Corporation Manufactures Numerous Products, One of Which Is Called

question 129

Multiple Choice

Whittenton Corporation manufactures numerous products, one of which is called Tau14. The company has provided the following data about this product: What is the net operating income for product Tau14 at the current price?

• A) $100,000
• B) $3,050,000
• C) $1,200,000
• D) $4,150,000

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead costs, based on efficient use of resources.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected (or standard) wage rate, multiplied by the total hours worked.

Variable Overhead Rate Variance

Variable overhead rate variance is the difference between the actual variable overhead costs incurred and the expected (standard) costs, influenced by fluctuations in production activity levels.