Exhibit 19-7 the Following Figures Represent 100% Capacity for Starr

question 133

Multiple Choice

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing:
Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved.
-Refer to Exhibit 19-7. Based on the information above, the standard variable manufacturing overhead cost in terms of standard direct labor hours is:

• A) $18,000
• B) $19,200
• C) $27,000
• D) $36,000

---

Definitions:

Temporary

Pertaining to or lasting for a limited time; in accounting, referring to accounts that are closed at the end of each accounting period, such as revenue and expense accounts.

Permanent

Refers to accounts or records in accounting that are not closed at the end of the accounting period and are carried over into the next period.

Temporary

Pertains to something not permanent or lasting only for a limited period of time.

General Journal

A primary accounting record used to record all types of transactions not assigned to any specialized journal.