Valera Corporation Makes a Product with the Following Standards for Labor

question 148

Multiple Choice

Valera Corporation makes a product with the following standards for labor and variable overhead: The company budgeted for production of 5,300 units in July, but actual production was 5,400 units. The company used 2,130 direct labor-hours to produce this output. The actual variable overhead rate was $6.10 per hour. The company applies variable overhead on the basis of direct labor-hours.The variable overhead rate variance for July is:

• A) $213 Favorable
• B) $216 Favorable
• C) $216 Unfavorable
• D) $213 Unfavorable

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Definitions:

Investments

Investments refer to assets or items acquired with the intention of generating income or appreciating in the future.

Trial Balance Totals

The cumulative sum of all debits and credits in a trial balance, which should equal to ensure the ledger is balanced.

Normal Balances

The side (debit or credit) of an account that is expected to have a positive balance.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, including the balance sheet, income statement, and statement of cash flows.