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

question 98

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 favourable labour efficiency variance would result in a credit balance in the labour
efficiency variance account.

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Definitions:

Primary Drives

Basic, instinctual drives that motivate behaviors necessary for survival, such as hunger, thirst, and avoidance of pain.

Physiologically-Based

Pertaining to the explanation or functioning of a phenomenon based on the biological processes and physical activities of living organisms.

Unlearned

Unlearned refers to behaviors or responses that are not acquired through learning or experience but are instead innate or natural.

Homeostasis

The regulatory process by which biological systems maintain stability and equilibrium while adjusting to conditions that are optimal for survival.