Buckingham Company Buckingham Company Uses a Standard Cost System for Its Production

question 198

Multiple Choice

Buckingham Company
Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:

• A)$2,187 U
• B)$9,937 F
• C)$2,187 F
• D)$2,937 F

Standard:
DLH per unit	2.50
Variable overhead per DLH	$1.75
Fixed overhead per DLH	$3.10
Budgeted variable overhead	$21,875
Budgeted fixed overhead	$38,750

Actual:
Direct labor hours	10,000
Variable overhead	$26,250
Fixed overhead	$38,000

Refer to Buckingham Company.Using the four-variance approach,what is the variable overhead efficiency variance?

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Definitions:

Expansion

The process of increasing the size, volume, number, or scope of a business or its activities.

Brand Extension Strategy

A marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category.

High Brand Equity

The value a brand adds to a product or service, reflected in consumer recognition, loyalty, and willingness to pay a premium.

Recognitions

The acknowledgement or appreciation of someone's effort, achievement, or status.