Reference: 11-01
Bryan Company Employs a Standard Cost System in Which

question 43

Multiple Choice

Reference: 11-01
Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product: $$\begin{array} { | l | l | l | l | } \hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \\\hline \text { Direct materials } & 6.0 \text { grams } & \$ 3.50 / \text { gram } & \$ 21.00 \\\hline \text { Direct labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & 14.30 \\\hline & & & \$ 35.30 \\\hline\end{array}$$ During March, Bryan purchased 165,000 grams of direct material at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March using 151,000 grams of direct material and 32,000 direct labour hours.
-Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

• A)Variable overhead efficiency variance.
• B)Fixed overhead volume variance.
• C)Fixed overhead budget variance.
• D)Variable overhead spending variance.

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