Bluecap Co During 2019, Bluecap Worked 28,000 DLHs and Manufactured 9,600 Units

question 83

Multiple Choice

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: $\begin{array}{lrr}\text { Denominator volume-number of units }&8,000\\\text { Denominator volume-percent of capacity }&80\%\\\text { Denominator volume-standard direct labor hours (DLHs) } & 24,000 \\\text { Budgeted variable factory overhead cost at denominator volume } & \$103,200 \\\text { Total standard factory overhead rate per DLH } &\$ 15.10\end{array}$ During 2019, Bluecap worked 28,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity") , to manufacture 9,000 units at a budgeted total of 27,000 DLHs.

The variable overhead efficiency variance in 2019 for Bluecap Co. (to nearest whole dollar) was:

• A) $3,440 favorable.
• B) $8,000 unfavorable.
• C) $9,200 favorable.
• D) $11,440 unfavorable.
• E) $17,200 unfavorable.

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Definitions:

Voluntary Response Sampling

A sampling method where participants decide for themselves whether to be included in the study, often leading to bias.

Utility Rates

The prices charged for essential public services such as electricity, gas, water, and sewage.

Phone-in Survey

A research method where participants provide their responses or opinions over a phone call, commonly used for collecting data from a wide geographical area.

Multistage Sampling

A complex form of sampling that involves selecting a sample through multiple stages, often used for large and complex populations.