The Following Data Is Given for the Walker Company Overhead Is Applied on Standard Labor Hours

question 19

Multiple Choice

The following data is given for the Walker Company: $$\begin{array} { l l } \text { Budgeted production } & 1,000 \text { units } \\\text { Actual production } & 980 \text { units } \\\text { Materials: } & \\\text { Standard price per lb } & \$ 2.00 \\\text { Standard pounds per completed unit } & 12 \\\text { Actual pounds purchased and used in production } & 11,800 \\\text { Actual price paid for materials } & \$ 23,000 \\\text { Labor: } & \\\text { Standard hourly labor rate } & \$ 14 \text { per hour } \\\text { Standard hours allowed per completed unit } & 4.5 \\\text { Actual labor hours worked } & 4,560 \\\text { Actual total labor costs } & \$ 62,928 \\\text { Overhead: } & \$ 27,000 \\\text { Actual and budgeted fixed overhead } & \$ 3.50 \text { per standard direct labor hour } \\\text { Standard variable overhead rate } & \$ 15,500\end{array}$$ Overhead is applied on standard labor hours. The variable factory overhead controllable variance is:

• A) $65 unfavorable.
• B) $65 favorable.
• C) $250 unfavorable.
• D) $250 favorable.

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Definitions:

Investment

Allocation of resources, usually money, in order to generate income or profit.

Cash Flows

The total amount of money being transferred into and out of a business, especially regarding liquidity.

Net Present Value

A technique employed in the process of capital allocation for evaluating the profitability of a project or investment through determining the net present value of cash inflows and outflows.

Mutually Exclusive Projects

Investment projects where the acceptance of one project prevents the acceptance of another due to resource constraints or other factors.