Neptune Inc The Total Factory Overhead Flexible-Budget Variance in April for Neptune

question 121

Multiple Choice

Neptune Inc. uses a standard cost system and has the following information for the most recent month, April: $\begin{array}{lr}\text { Actual direct labor hours (DLHs) worked } & 17,000 \\\text { Standard DLHs allowed for good output produced this period } & 18,000 \\\text { Actual total factory overhead costs incurred } & \$ 45,400 \\\text { Budgeted fixed factory overhead costs } & \$ 10,800 \\\text { Denominator activity level, in direct labor hours (DLHs) } & 15,000 \\\text { Total factory overhead application rate per standard DLH } & \$ 2.70\end{array}$ The total factory overhead flexible-budget variance in April for Neptune, Inc., to the nearest whole dollar, was:

• A) $940 unfavorable.
• B) $1,040 favorable.
• C) $1,980 favorable.
• D) $2,160 favorable.

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Definitions:

Estimator

An estimator refers to a statistic used to estimate the value of a population parameter based on sample data.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, typically denoted by alpha (α).

Pilots' Union

An organization representing the collective interests of pilots, often involved in bargaining for better wages, working conditions, and safety standards.

Confidence Interval

A range of values, derived from the sample data, that is likely to contain the value of an unknown population parameter.