Miguez Corporation Makes a Product with the Following Standard Costs

question 4

Multiple Choice

Miguez Corporation makes a product with the following standard costs:
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
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 September is:

• A) $175 F
• B) $168 U
• C) $168 F
• D) $175 U

---

Definitions:

Markets

Venues or systems where buyers and sellers engage in the exchange of goods, services, and information.

Constant Marginal Cost

A situation where the cost of producing an additional unit of output does not change with the level of production.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating a greater responsiveness.

Profit-Maximizing Price

The optimal selling price for a product or service that leads to the highest possible profits for the producer or seller.