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

question 107

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 actual direct labour rate for May in dollars per hour was:

• A)$11.75.
• B)$12.00.
• C)$12.50.
• D)$11.50.

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Definitions:

Diesel Fuel

A type of fuel derived from petroleum, used in diesel engines.

Gallons

A unit of volume for fluid measure equal to four quarts, used in the United States.

Minutes

A unit of time equal to sixty seconds or one-sixtieth of an hour.

Hours

A unit of time equal to 60 minutes.