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

question 33

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 total standard cost for variable overhead for May was:

• A)$60,000.
• B)$40,000.
• C)$50,000.
• D)$56,000.

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Definitions:

Hawthorne Effect

A specific example of reactivity, in which the desired effect is the result not of the independent variable but of the research itself.

Sociologists

Experts in the study of society and social behavior, examining the structure of societies, groups, and institutions.

Productivity Levels

A measure of the efficiency of production, often evaluated as the ratio of output to inputs in a given time period.

Ethnography

A qualitative research method focused on studying cultures and communities through direct observation, participation, and interviews.