Leshem Incorporated Makes a Single Product--An Electrical Motor Used in Many

question 9

Multiple Choice

Leshem Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:
The variable overhead rate variance is:

• A) $9,184 U
• B) $8,528 F
• C) $9,184 F
• D) $8,528 U

---

Definitions:

European Put

A type of put option that can only be exercised at its expiration date, not before.

American Put

An option contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price before or on a specified date.

Real Option

The choice available to managers regarding business investments, such as expanding, deferring, or abandoning a project, based on changing conditions.

Fixed Price

A pricing strategy where the cost of a good, service, or contract does not change, regardless of variations in market conditions or production costs.