Reference: 11-11
the Clark Company Makes a Single Product and Uses

question 112

True/False

Reference: 11-11
The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-A limitation of a static budget is that a favourable revenue variance based upon higher
than planned activity levels will usually result in unfavourable variable cost variances.

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Definitions:

AV Node

The atrioventricular node, a part of the heart's electrical control system that acts as a gatekeeper for electrical impulses between the atria and ventricles.

Parasympathetic Nerve

Nerves that are part of the autonomic nervous system, responsible for conserving energy and slowing down bodily functions.

Sympathetic Nerve

Part of the autonomic nervous system that prepares the body for stress-related activities, often described as the "fight or flight" response.

Potassium Ions

Charged particles of potassium that are essential for various physiological processes in the body, including nerve signal transmission and muscle contraction.