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

question 24

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: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-Quantity standards indicate how much of an input should be used for manufacturing one unit of product or in providing one unit of service.

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Definitions:

Cumulative

Cumulative refers to the total amount accumulated over a series of periods, often used in the context of dividends or other accumulative data.

Undeclared Dividends

Dividends that have been earned by shareholders but have not yet been declared by the company's board of directors.

Prior Claim

A legal right or financial obligation that takes precedence over others, typically in the context of creditors in bankruptcy proceedings.