Brummer Corporation Makes a Product Whose Variable Overhead Standards Are

question 61

Multiple Choice

Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour.The variable overhead rate variance for January is:

• A) $91 Favorable
• B) $87 Favorable
• C) $91 Unfavorable
• D) $87 Unfavorable

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Definitions:

Unusual

Anything that is not common, ordinary, or expected; deviating from what is typical or normal.

Stereotype Inconsistent

Information or behavior that contradicts common stereotypes or generalizations about a group.

Prototype

An early sample or model of a product used to test a concept or process or to act as a thing to be replicated or learned from.

Cognitive Representation

The way in which knowledge and ideas are mentally structured and stored, influencing perception and understanding.