Wadding Corporation Applies Manufacturing Overhead to Products on the Basis

question 35

Multiple Choice

Wadding Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 3,600 machine-hours.Budgeted and actual overhead costs for the month appear below:
The company actually worked 3,900 machine-hours during the month.The standard hours allowed for the actual output were 3,890 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

• A) $760 Favorable
• B) $104 Unfavorable
• C) $180 Favorable
• D) $656 Favorable

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Definitions:

Break-even Point

The production level or sales volume at which total costs equal total revenue, resulting in no profit or loss.

Sales Mix

The combination of different products or services that a company sells, significantly influencing overall profitability.

Fixed Costs

Overheads such as rent, salaries, and insurance that do not fluctuate with changes in the volume of production or sales.

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss and marking the threshold for profitability.