The Following Standards for Variable Manufacturing Overhead Have Been Established

question 76

Multiple Choice

The following standards for variable manufacturing overhead have been established for a company that makes only one product: $\begin{array}{lccc}\text {Standard hours per unit of output}&\text {7.8 hours}\\\text {Standard variable overhead rate}&\text { \$ 12.55 per hour}\\\end{array}$
The following data pertain to operations for the last month: $\begin{array} { l r } \text { Actual hours } & 2,900 \text { hours } \\\text { Actual total variable overhead cost } & \$ 36,975 \\\text { Actual output } & 200 \text { units }\end{array}$ What was the variable overhead efficiency variance for the month?

• A) $0.
• B) $16,817 unfavourable.
• C) $580 unfavourable.
• D) $17,397 unfavourable.

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Definitions:

Steamboats

Paddlewheelers that could travel both up- and downriver in deep or shallow waters; they became commercially viable early in the nineteenth century and soon developed into America’s first inland freight and passenger service network.

Upstream Commerce

The activities involved in the sourcing and procurement processes before goods reach the retailer or final consumer.

Water Transportation

A method of transporting goods and people using waterways, including oceans, rivers, lakes, and canals, utilizing various types of vessels.

Road Transportation

The movement of goods and people from one place to another over roads, using vehicles such as cars, trucks, and buses.