The Following Information Is Available from the Terry Company What Was the Variable Overhead Efficiency Variance for the Period

question 74

Multiple Choice

The following information is available from the Terry Company: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 25,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,400 \\\text { Budgeted fixed overhead expenses } & \$ 11,000 \\\text { Actual direct labor hours (DLH) worked } & 4,400 \\\text { Standard DLHs for this period's production (output) } & 4,000 \\\text { Standard variable overhead rate per DLH } & \$ 3.00 \\\text { Standard fixed overhead rate per DLH } & \$ 2.50\end{array}$ What was the variable overhead efficiency variance for the period, to the nearest whole dollar?

• A) $600 favorable.
• B) $800 unfavorable.
• C) $1,200 unfavorable.
• D) $1,400 unfavorable.
• E) $2,000 unfavorable.

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Definitions:

Process Capability Index

A statistical measure that evaluates a process's ability to produce output within specified limits, indicating the consistency and reliability of the process.

Process Variation

Deviations in business or manufacturing processes that lead to inconsistencies in product quality or performance.

Trade Customs

Practices and guidelines established by conventions between parties in a particular trade or industry.

Cost Accounting

The process of recording, classifying, analyzing, and allocating all costs associated with a process, product, or project.