Majer Corporation Makes a Product with the Following Standard Costs

question 78

Multiple Choice

Majer Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in February.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The variable overhead rate variance for February is:

• A) $191 U
• B) $191 F
• C) $196 U
• D) $196 F

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Definitions:

Actual Output

The real quantity of goods or services produced by a business during a specific period, as opposed to planned or potential output.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of materials that were expected to be used.

February

The second month of the year in the Gregorian calendar, known for having 28 days in common years and 29 days in leap years.

Variable Overhead Efficiency Variance

A measure of the efficiency in which variable overheads are used, calculated by comparing the standard cost of variable overhead for actual production to the actual variable overhead incurred.