The Clark Company Makes a Single Product and Uses Standard

question 154

Multiple Choice

The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow:
$\begin{array} { | l | r | } \hline \text { Labour rate variance } & \$ 7,000 \text { favourable } \\\hline \text { Labour efficiency variance } & \$ 12,000 \text { favourable } \\\hline \text { Variable overhead efficiency variance } & \$ 4,000 \text { favourable } \\\hline \text { Number of units produced } & 10,000 \\\hline \text { Standard labour rate per direct labour hour } & \$ 12 \\\hline \text { Standard variable overhead rate per direct labour hour } & \$ 4 \\\hline \text { Actual labour hours used } & 14,000 \\\hline \text { Actual variable manufacturing overhead costs } & \$ 58,290 \\\hline\end{array}$


-What was the variable overhead spending variance for May?

• A) $1,710 favourable.
• B) $1,710 unfavourable.
• C) $2,290 favourable.
• D) $2,290 unfavourable.

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Definitions:

Fraudulent Intent

The deliberate intention to deceive or cheat, often for personal gain or to cause loss to another.

Reasonably Foreseeable Users

Individuals who could be expected to use or be affected by a product or service, considered in legal and design considerations.

Accountant Liability

The obligation of accountants to adhere to ethical and accurate reporting standards, failing which they may face legal consequences.

Securities Misrepresentations

Involves providing false or misleading information about a company or its financial vehicles, impacting investors' decisions.