Priority Company, Which Applies Overhead to Production on the Basis

question 31

Multiple Choice

Priority Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 9,000
Actual variable overhead incurred: $54,400
Actual machine hours worked: 16,000
Standard variable overhead cost per machine hour: $3.50
If Priority estimates two hours to manufacture a completed unit, the company's variable-overhead efficiency variance is:

• A) $1,600 favorable.
• B) $1,600 unfavorable.
• C) $7,000 favorable.
• D) $7,000 unfavorable.
• E) None of the answers is correct.

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Definitions:

Levels

Distinct categories or values that independent or dependent variables can take in a study or experiment.

dfWG

Degrees of freedom within groups, a concept in statistical analysis that represents the number of independent pieces of information available to estimate a parameter or calculate a statistic within a subset or group.

Degrees of Freedom

The total amount of discrete variables or numbers that are able to fluctuate within a study without breaking any limitations.

Factor B

A variable or condition that is manipulated or varied in an experiment, considered distinct from other variables or conditions.