The Following Information for the Past Year Is Available from Thinnews

question 25

Multiple Choice

The following information for the past year is available from Thinnews Co., a company that uses machine hours to apply standard factory overhead cost to outputs: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 24,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,000 \\\text { Budgeted fixed overhead cost } & \$ 11,000 \\\text { Actual machine hours } & 5,000 \\\text { Standard machine hours allowed for the units manufactured } & 4,800 \\\text { Denominator volume-machine hours } & 5,500 \\\text { Standard variable overhead rate per machine hour } & \$ 3.00\end{array}$ The variable factory overhead efficiency variance, to the nearest dollar, is:

• A) $600 unfavorable.
• B) $1,000 favorable.
• C) $1,400 unfavorable.
• D) $1,500 favorable.
• E) $2,100 favorable.

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Definitions:

Business Decisions

Choices or judgments made by individuals or groups in the context of business operations that affect its direction and outcomes.

Trustworthiness

A measure of reliability and integrity in individuals or organizations.

Ethical Principles

The fundamental guidelines that dictate proper conduct and decision-making, based on moral values.

Sophisticated Clients

Individuals or organizations with a high level of knowledge, experience, and resources in financial or legal matters, enabling them to make informed decisions.