Reference: 11-11
the Clark Company Makes a Single Product and Uses

question 55

Multiple Choice

Reference: 11-11
The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-The standards for direct labour for a product are 2.5 hours at $8 per hour. 9,000 units of the product were made and the labour efficiency variance was $8,000 F. The actual number of hours worked during the past period was:

• A)23,500.
• B)22,500.
• C)20,500.
• D)21,500.

---

Definitions:

Vortex Flow

Eddy force created by rotational movement. Both a whirlpool and a tornado produce vortex flow, as do the dynamics of a torque converter. See vortex oil flow.

Torque Multiplied

The increase in torque generated through the use of a mechanical system like a gearbox, allowing for greater force to be applied without increasing input power.

Flex Plate

A component in automatic transmission vehicles that connects the engine to the torque converter, allowing for flexion and torque transfer.

Crankshaft

A crucial engine component that converts the reciprocating motion of the pistons into rotational motion to drive the vehicle.