Mauve Company Uses a Standard Cost System That Applies Manufacturing

question 134

Multiple Choice

Mauve Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs) .The following data pertain to last month: $\begin{array} { l r } \text { Actual Hours Worked } & 2,400 \mathrm { DLHs } \\\text { Budgeted Fixed Overhead Costs } & \$ 10,000 \\\text { Actual Fixed Overhead Costs } & \$ 10,400 \\\text { Standard Hours Allowed } & 2,500 \mathrm { DLHs } \\\text { Predetermined Overhead Rate } & \$ 5 \text { per DLH }\end{array}$
What was the fixed overhead budget variance?

• A) $300 favourable.
• B) $300 unfavourable.
• C) $400 unfavourable.
• D) $500 favourable.

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Definitions:

Holt's Model

A forecasting technique that extends exponential smoothing to allow forecasting of data with trends by adding a trend smoothing coefficient.

Trend Component

A pattern or direction in data series that shows movement in a particular direction over time, often identified in time-series analysis.

Historical Demand

The record of past consumer purchasing behavior that is used to predict future demand patterns.

Qualitative Forecasting Methods

Forecasting techniques based on expert judgments and not on numerical data, often used for market trends.