Let AP = Actual Price the Company Pays for Variable

question 91

Multiple Choice

Let AP = actual price the company pays for variable overhead costs per direct labor hour, SP = the standard price the company planned to pay for variable overhead per direct labor hour, AH = the actual direct labor hours used, and SH = the standard direct labor hours for a given level of production. The variable overhead efficiency variance equals

• A) AP × (AH - SH)
• B) SP × (AH - SH)
• C) AH × (AP - SP)
• D) SH × (AP - SP)

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Definitions:

Infer

To deduce or conclude information from evidence and reasoning rather than from explicit statements.

Extraneous Variables

Extraneous variables are those that are not the focus of a study but may influence its outcome, potentially confounding the results if not controlled.

Random Assignment

A procedure in experimental design that ensures every participant has an equal chance of being assigned to any group, enhancing the validity of results.

Experimental Methods

A research technique that tests hypotheses and establishes cause-and-effect relationships between variables.