Fletcher Company Collected the Following Data Regarding Production of One

question 154

Multiple Choice

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency 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) $14,300 unfavorable.
• B) $21,450 favorable.
• C) $4,000 unfavorable.
• D) $4,000 favorable.
• E) $21,450 unfavorable.

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Contingent Consideration

An obligation to transfer additional assets or equity interests if certain predefined conditions are met post-acquisition.

Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership value held by shareholders.

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The figure that represents either the income from an asset sale or the expense for settling a liability during a coordinated trade between market participants on the agreed upon date of appraisal.