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

question 28

Multiple Choice

Pearce Company
Pearce Company uses a standard cost system for its production process.Pearce Company applies overhead based on direct labor hours.The following information is available for July:

• A)$11,770 F
• B)$2,200 F
• C)$7,975 U
• D)$5,775 U

Standard:
DLH per unit	2.20
Variable overhead per DLH	$2.50
Fixed overhead per DLH
Budgeted variable overhead	$3.00
(based on 11,990 DLHs)

Actual:
Units produced	4,400
Direct labor hours	8,800
Variable overhead	$29,950
Fixed overhead	$42,300

Refer to Pearce Company Using the three-variance approach,what is the efficiency variance?

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Definitions:

Facilitating Function

Activities that assist in the movement of goods from the producer to the consumer, including transportation, storage, and financial services.

Channel Intermediaries

Organizations or individuals that act as middlemen in the distribution process, helping to move products from the manufacturer to the consumer.

Direct Channel

A method of distribution where a company sells its products or services directly to consumers without the use of intermediaries.

Producers

Entities or individuals that create, manufacture, or supply goods and services for consumption by consumers or other businesses.