Use the Following Information for the Next 3 Questions

question 31

Multiple Choice

Use the following information for the next 3 questions.
Anacortes, Inc. uses a standard cost system. At the beginning of the year, it budgeted $50,000 for fixed overhead. The estimated variable overhead allocation rate was $3.30 per machine hour, and machine hours is the cost allocation base for both variable and fixed overhead. The static budget was based on 16,000 units of production and sales, and each unit was expected to use 2.5 machine hours. Actual total overhead was $170,000, and Anacortes produced and sold 15,000 units during the year. Actual machine hours for the year were 36,000.
-The variable overhead efficiency variance was

• A) $4,950 favorable
• B) $3,750 favorable
• C) $1,200 unfavorable
• D) $3,125 unfavorable

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values; a low standard deviation indicates that the values are close to the mean, while a high standard deviation indicates greater spread.

4 × 100 Relay

The 4 × 100 relay is an athletics track event where four team members each run 100 meters, passing a baton in a race against other teams.

Independent

A term typically used in statistics to describe a condition where two events or variables have no influence on each other.

Random Variable

A variable whose values are determined by the numerical results of a random event.