Viger Corporation Has a Standard Cost System in Which It

question 259

Multiple Choice

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) . The company has provided the following data for the most recent month: What was the variable overhead rate variance for the month?

• A) $1,434 Favorable
• B) $940 Favorable
• C) $1,320 Unfavorable
• D) $2,260 Favorable

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Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with output levels.

Average Total Cost

The per-unit production cost, calculated by dividing the overall production expenses by the number of units produced.

Price Taker

An economic term for a market participant that accepts the prevailing prices without influencing them.