Somalian Corporation Uses a Standard Costing System The Factory Overhead Rate Is Based on a Normal Volume

question 16

Multiple Choice

Somalian Corporation uses a standard costing system. Information for the month of May is as follows: $\begin{array}{ll}\text { Actual manufacturing overhead costs }(\$ 26,000 \text { is fixed) } & \$ 80,000 \\\text { Direct labor: } & \\\text { Actual hours worked } & 12,000 \text { hrs. } \\\text { Standard hours allowed for actual production } & 10,000 \text { hrs. } \\\text { Average actual labor cost per hour } & \$ 18\end{array}$
The factory overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct labor hours were as follows:

$\begin{array}{lr}\text { Variable factory overhead } & \$ 48,000 \\\text { Fixed factory overhead } & 24,000 \\\text { Total factory overhead } & \underline{\mathbf{\$ 72}, 000}\end{array}$
What is the fixed overhead spending variance for Somalian?

• A)$4,000 (U)
• B)$8,000 (U)
• C)$2,000 (U)
• D)$20,000 (U)

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Definitions:

Potassium Ions

Charged particles of potassium, a crucial mineral that plays key roles in cell function, including heart rhythm, muscle contraction, and nerve transmission.

Chloride Ions

Negatively charged particles (ions) that play key roles in maintaining cell stability, transmitting nerve impulses, and regulating fluid inside and outside of cells.

Sodium-Potassium Pump

A crucial cellular mechanism that moves sodium ions out of and potassium ions into cells, vital for maintaining cellular function and electrochemical gradients.

Intracellular

Relating to or occurring within a cell, encompassing the events, reactions, and processes in the cellular interior.