The Claus Company Makes and Sells a Single Product and Uses

question 6

Multiple Choice

The Claus Company makes and sells a single product and uses standard costing. During January, the company actually used 8,700 direct labour hours (DLHs) and produced 3,000 units of product. The standard cost card for one unit of product includes the following:

Variable Factory Overhead: 3.0 DLHs @ $4.00 per DLH.
Fixed Factory Overhead: 3.0 DLHs. @ $3.50 per DLH.

For January, the company incurred $22,000 of actual fixed overhead costs and recorded an $875 favourable volume variance.




-What was the budgeted fixed factory overhead cost for January?

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Definitions:

Low Prices

A competitive pricing strategy where products or services are offered at a lower price than competitors to attract more customers.

Perceived Price

The customer's view of the value of a product or service, which may differ from its actual price, influenced by quality, brand, and other factors.

Overall Sacrifice

The total cost that a consumer perceives when purchasing a product or service, including money, time, and effort.

Monetary Payment

The process of transferring money, or its equivalent, from one party to another as compensation for goods or services provided.