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

question 28

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 variable overhead spending variance for May was:

• A)$1,710 F.
• B)$2,290 U.
• C)$2,290 F.
• D)$1,710 U.

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Definitions:

Oral Stage

A phase in Freud's psychosexual development theory occurring from birth to about 18 months, where an infant's pleasure centers on the mouth.

Defense Mechanisms

Unconscious psychological strategies brought into play by the mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Ego

In psychoanalytic theory, the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Anxiety

An emotion of anxiety or tension, characteristically over an event that is about to happen or whose result is indeterminate.