If Variable Manufacturing Overhead Is Applied on the Basis of Direct

question 145

Multiple Choice

If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then:

• A) the actual variable overhead rate exceeded the standard rate.
• B) the standard variable overhead rate exceeded the actual rate.
• C) the actual direct labor-hours exceeded the standard direct labor-hours allowed for the actual output.
• D) the standard direct labor-hours allowed for the actual output exceeded the actual hours.

---

Definitions:

Self-Interest

Self-Interest is a person's own personal gain or advantage in making decisions or performing actions, often considered as the driving force behind economic activities.

Confess

To admit or acknowledge something reluctantly, often about a wrongdoing or mistake.

Optimization Strategy

A plan or method aimed at making the best or most effective use of resources within defined constraints to achieve a set goal.

Growth Related Profit

Profit that results from expansion in business size, output, or market share, indicative of a company’s growth.