(Appendix 10A) the Chuba Corporation Uses a Standard Cost System

question 1

Multiple Choice

(Appendix 10A) The Chuba Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs) . During December, the company actually used 7,200 direct labor-hours and made 1,900 units of finished product. The standard cost card for one unit of product includes the following data concerning manufacturing overhead:
Variable overhead: 4 DLHs @ $5.25 per DLH
Fixed overhead: 4 DLHs @ $2.00 per DLH
For December, the company incurred $16,550 in fixed manufacturing overhead costs and recorded an $800 unfavorable volume variance.
-The budgeted fixed manufacturing overhead cost was:

• A) $15,200
• B) $16,000
• C) $16,550
• D) $13,700
• E) $14,400

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Definitions:

Rate of Return

The positive or negative change in an investment's worth within a specific period, shown as a percent of the cost of the investment.

Investment Account

A financial account held at a financial institution that holds investments such as stocks, bonds, mutual funds, and other assets for the investor.

Compounding Effect

The method by which an investment's worth grows over time as the returns it generates, including both capital gains and interest, themselves accumulate interest.

Present Value

Present value is the today's worth of an anticipated future amount of money or cash flows, factoring in a specified rate of return.