Tyro Company Has a Standard Cost System That Applies Manufacturing

question 129

Multiple Choice

Tyro Company has a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs) .The following information is available: $\begin{array} { l r } \text { Actual Total Overhead Costs } & \$ 15,000 \\\text { Actual Fixed Overhead Costs } & \$ 7,200 \\\text { Budgeted Fixed Overhead Costs } & \$ 7,000 \\\text { Actual Hours Worked } & 3,500 \text { DLHs } \\\text { Standard Hours Allowed for the Output } & 3,800 \text { DLHs } \\\text { Variable Overhead Rate } & \$ 2.50 \text { per DLH }\end{array}$ Based on these data,what was the variable overhead spending variance?

• A) $750 unfavourable.
• B) $950 favourable.
• C) $1,500 unfavourable.
• D) $1,700 favourable.

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Definitions:

Expected Value

A statistical concept that calculates the average outcome of a random event, considering all possible outcomes and their probabilities.

Be Cautious

An admonition advising individuals to act with care and consideration of potential risks.

Thought-Activated Software

Software interfaces that are controlled through brain waves or thoughts, enabling hands-free operation.

Expected Gain

The anticipated value or return from an investment, calculated by assessing probable outcomes and their probabilities.