Bluecap Co

question 93

Multiple Choice

Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010:
During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The variable overhead efficiency variance in 2010 is:

• A)$3,440 favorable.
• B)$8,000 unfavorable.
• C)$9,200 favorable.
• D)$11,440 unfavorable.
• E)$17,200 unfavorable.

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Definitions:

Ovens

Cookery appliances designed for baking, roasting, and heating food through the application of direct or indirect heat.

Economies of Scope

Cost advantages that enterprises obtain through diversification and the production of a variety of goods rather than specializing in a single product.

Multiproduct Firms

Companies that produce and sell more than one product or service, often benefiting from economies of scope.

Technology

Refers to the application of scientific knowledge for practical purposes, especially in industry.