Figure 17-5
Ebola Company Has Developed the Following Standards for One

question 39

Multiple Choice

Figure 17-5
Ebola Company has developed the following standards for one of its products: $\begin{array}{ll}\text { Direct materials } & 20 \text { pounds } \times £ 4 \text { per pound } \\\text { Direct labour } & 5 \text { hours } \times £ 18 \text { per hour } \\\text { Variable overhead } & 5 \text { hours } \times £ 4 \text { per hour }\end{array}$ The following activities occurred during the month of October: $\begin{array}{ll}\text { Materials purchased } & 230,000 \text { pounds at } £ 4.20 \text { per pound } \\\text { Materials used } & 220,000 \text { pounds } \\\text { Units produced } & 10,000 \text { units } \\\text { Direct labour } & 51,000 \text { hours at } £ 17.70 \text { per hour } \\\text { Actual variable overhead } & £ 240,000\end{array}$ The company records materials price variances at the time of purchase.
-Refer to Figure 17-5. Ebola's variable overhead spending variance would be

• A)£36,000 favourable.
• B)£36,000 unfavourable.
• C)£40,000 favourable.
• D)£40,000 unfavourable.

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Definitions:

Logical Support

The evidence or reasoning offered to substantiate a claim or argument within logical discourse.

Angry Tone

A method of expression that conveys feelings of displeasure or irritation.

Truth

The quality or state of being in accord with fact or reality, or fidelity to an original or standard.

Hair Brush

A tool consisting of a handle and a bristled head used for styling, smoothing, and detangling hair.