Handerson Corporation Makes a Product with the Following Standard Costs

question 59

Multiple Choice

Handerson Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor efficiency variance for August is:

• A) $2,400 Unfavorable
• B) $2,400 Favorable
• C) $2,352 Favorable
• D) $2,352 Unfavorable

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Definitions:

Payback Periods

The length of time required to recover the original investment cost through the generated returns.

Profitable

A financial state where earnings exceed expenses, resulting in a positive net income.

Discount Rate

The discount rate applied in DCF analysis to calculate the current value of future cash flows.

Net Present Value

The discrepancy between the current worth of incoming cash and the current worth of outgoing cash over a certain timeframe, utilized in the process of capital budgeting to evaluate an investment's profitability.