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

question 56

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: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-In a standard cost system, the resources applied to production are recorded as additions to work in process inventory using the standard quantities and the standard prices for each actual unit added.

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Definitions:

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than competitors.

Trade

The process of purchasing, selling, or trading goods and services among individuals, companies, or nations.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance without excess supply or demand.

Tax Policy

The set of laws and regulations governing how taxes are collected, managed, and utilized by a government.