Nora, IncManufactures Components Used by a Major Cell Phone Manufacturer

question 143

Multiple Choice

Nora, Inc.manufactures components used by a major cell phone manufacturer.During the year, Nora produced 160,000 components and used 40,500 direct labor hours.Nora based its current year budget on a production level of 150,000 components each of which requires 15 minutes of direct labor time.Total budgeted variable overhead for the year was $131,250.Actual variable overhead for the year was $145,800.What is Nora's flexible budget variable overhead variance?

• A)$5,800 favorable
• B)$5,800 unfavorable
• C)$4,050 unfavorable
• D)$4,050 favorable

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Definitions:

Severity

The level of intensity or seriousness of a situation, condition, or disease.

Delay

The act of postponing or causing something to occur at a later time than originally planned or expected.

Negative Reinforcement

A process in operant conditioning where a response is strengthened by stopping, removing, or avoiding a negative outcome or aversive stimulus.