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

question 124

True/False

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: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-A positive revenue variance is favourable and a positive cost variance is favourable.

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Definitions:

Market Fluctuations

Variations or changes in market prices and conditions over a period of time.

Delegating Decision Making

The process of transferring the authority and responsibility for decision-making to another person or group.

Leader

An individual who guides or directs a group towards achieving a common objective by influencing others.

Group Deliberations

The process of discussing and considering various perspectives and options within a group to reach a collective decision.