Megan, Inc

question 141

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 fixed overhead production volume variance for Megan, Inc. for the past month (to the nearest whole dollar) was:

• A) $0.
• B) $3,000 unfavorable.
• C) $5,000 unfavorable.
• D) $20,000 unfavorable.
• E) Cannot be determined without additional information.

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Definitions:

Chameleon Effect

The unconscious mimicry of the gestures, behaviors, or expressions of others in social situations, often to create social rapport.

Conformity

The phenomenon whereby an individual alters his or her beliefs, attitudes, or behavior to bring them in accordance with those of a majority.

Participant

An individual who takes part in something, especially in a study, experiment, or survey, contributing data or insights.

People Looking Up

This could refer to a phenomenon where individuals look towards others, literally or figuratively, for guidance, inspiration, or in admiration.