Reference: 11-13
the Upton Company Employs a Standard Costing System

question 94

Multiple Choice

Reference: 11-13
The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following:
Variable manufacturing overhead cost incurred: $48,700
Total variable overhead variance: $300 F
Standard hours allowed for actual production: 7,000
Actual direct labour hours worked: 6,840
-For the month of April, Thorp Co.'s records disclosed the following data relating to direct labour: $$\begin{array} { | l | l | l | } \hline \text { Actual cost } & \$ 10,000 & \\\hline \text { Rate variance } & \$ 1,000 & \text { favourable } \\\hline \text { Efficiency variance } & \$ 1,500 & \text { unfavourable } \\\hline\end{array}$$ For the month of April, actual direct labour hours amounted to 2,000. In April, Thorp's standard direct labour rate per hour was:

• A)$4.50.
• B)$5.50.
• C)$4.75.
• D)$5.00.

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Definitions:

Assets

Resources owned by a business or individual that have economic value and can be converted into cash.

Capital

Financial resources or assets owned by an individual or business, used to fund operations, invest in business ventures, or acquire assets.

Liabilities

Monetary commitments or liabilities that a business is responsible for repaying to others in the future.

Revenue

The total income generated from normal business operations, including sales of goods and services before any expenses are deducted.