Orange, Inc

question 139

Multiple Choice

Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:

• A)$1,500.
• B)$1,560.
• C)$2,000.
• D)$2,400.
• E)$2,560.

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Definitions:

Direct Labor Variances

The differences between the actual costs of labor and the standard or expected costs, used to assess how effectively labor resources are used.

Direct Labor

Direct labor costs are the wages paid to workers directly involved in the production of goods or services. These costs are directly traceable to the cost object, such as a product unit.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, which can indicate changes in materials prices or sourcing efficiency.

Direct Materials

Basic substances used explicitly in the production of a particular item, which can be directly linked to its creation.