Megan, Inc

question 69

Multiple Choice

Megan, Inc. uses the following standard costs per unit for one of its products: Direct labor (2.0 hrs. @ $5.00/hr.) = $10.00; overhead (2.0 hrs. @ $2.50/hr.) = $5.00. The flexible budget for overhead is $120,000 plus $1.00 per direct labor hour (DLH) . Actual data for the past month show total overhead costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units produced.

The total overhead variance for the past month for Megan, Inc., to the nearest whole dollar, was:

• A) $0.
• B) $3,000 unfavorable.
• C) $5,000 unfavorable.
• D) $20,000 unfavorable.
• E) $25,000 unfavorable.

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Definitions:

Irreversibility

The cognitive incapacity in early childhood to understand that actions, once performed, can be undone to return to the original state.

Mental Undo

The cognitive process of reversing or attempting to reverse the effects of one’s earlier actions or decisions.

Piaget

Jean Piaget was a Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development that describes how children develop intellectually throughout the course of childhood.

Egocentric

Having or regarding oneself as the center of all interests and perspectives, often ignoring others' viewpoints.