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

question 49

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 standard hours allowed to make one unit of finished product are:

• A)1.5.
• B)1.0.
• C)1.2.
• D)2.0.

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Definitions:

Customer Needs

The recognized desires or requirements of consumers that drive their purchasing behaviors and decisions.

Modular Design

A design approach that divides a system into smaller parts called modules, which can be independently created, modified, replaced, or exchanged with other modules.