Fletcher Company Collected the Following Data Regarding Production of One

question 193

Multiple Choice

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance. $\begin{array}{lrl}\text { Direct labor standard (2 hrs. @ } \$ 12.75 / \mathrm{hr} .) & \$ 25.50& \text { per finished unit} \\\text { Actual direct labor hours } & 81,500& \text { hrs.} \\\text { Budgeted units } & 42,000& \text { units} \\\text { Actual finished units produced } & 40,000 & \text { units}\\\text { Standard variable OH rate }(2 \mathrm{hrs} . @ \$ 14.30 / \mathrm{hr} .) & \$ 28.60& \text { per finished unit} \\\text { Standard fixed OH rate }(\$ 336,000 / 42,000 \text { units) } & \$ 8.00 & \text { per unit}\\\text { Actual cost of variable overhead costs incurred } & \$ 1,140,000 \\\text { Actual cost of fixed overhead costs incurred } & \$ 338,000\end{array}$

• A) $25,450 favorable.
• B) $4,000 favorable.
• C) $4,000 unfavorable.
• D) $21,450 unfavorable..
• E) $21,450 favorable.

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Definitions:

Bronchi

The main passageways directly attached to the lungs that allow the passage of air in and out of the lungs.

Alveoli

Tiny air sacs within the lungs where gas exchange between the air and blood occurs.

Dalton's Law

The principle that the total pressure exerted by a mixture of gases is equal to the sum of the pressures that each would exert if it were present alone.

Partial Pressures

The pressure that a single gas in a mixture of gases would exert if it alone occupied the entire volume of the mixture.