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

question 176

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)$ 7,950 U
• B)$ 25 F
• C)$ 7,975 U
• D)$10,590 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 four-variance approach,what is the variable overhead spending variance?

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Definitions:

Coercive Power

A form of power that is exerted through the use of threats, punishment, or force to influence others to comply with demands or orders.

Legitimate Power

A type of power that is recognized and accepted by the society or organization in which it operates, often derived from a formal position or role.

Tacit Power

Unspoken, yet understood authority or influence that individuals or groups may hold, often derived from social positions or relationships.

Legal-Rational Authority

Is typical of modern societies. It derives from respect for the law. Laws specify how a person can achieve office. People generally believe laws are rational. If someone achieves office by following laws, people respect his or her authority.