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

question 55

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 standards for direct labour for a product are 2.5 hours at $8 per hour. 9,000 units of the product were made and the labour efficiency variance was $8,000 F. The actual number of hours worked during the past period was:

• A)23,500.
• B)22,500.
• C)20,500.
• D)21,500.

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Definitions:

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A drilling operation carried out to find out if there are any valuable minerals or hydrocarbons present in the subsurface.

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Sands that allow the passage of fluids through their pores or spaces, often used in filtering and drainage applications.

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A common type of intrusive, felsic, igneous rock which is granular and phaneritic in texture, composed mainly of quartz and feldspar.

Gravity Signal

Represents the measurable effects of gravity on Earth's surface, which can indicate variations in Earth's density and structure.