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

question 14

Multiple Choice

Commodore Company
Commodore Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for September when Commodore produced 5,000 units:

• A)$ 750 F
• B)$ 750 U
• C)$1,000 F
• D)$1,000 U

Standard:
DLH per unit	3.00
Variable overhead per DLH	$1.80
Fixed overhead per DLH	$3.25
Budgeted variable overhead	$27,250
Budgeted fixed overhead	$49,500

Actual:
Direct labor hours	16,000
Variable overhead	$31,325
Fixed overhead	$49,750

Refer to Commodore Company.Using the two-variance approach,what is the noncontrollable variance?

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Definitions:

Total Interest Cost

The sum of all interest payments over the life of a loan, reflecting the true cost of borrowing.

Interest Paid

The amount paid by a borrower to a lender for the privilege of using borrowed money, typically expressed as an annual percentage of the loan outstanding.

Bond Discount

The gap between the nominal value of a bond and the price it fetches on the market when it is sold for an amount lower than its nominal value.

Straight-Line Amortization

A method of systematically reducing the cost value of an intangible asset over its useful life by charging equal expense amounts to each accounting period.