Irving Corporation Makes a Product with the Following Standards for Direct

question 107

Multiple Choice

Irving Corporation makes a product with the following standards for direct labor and variable overhead:
In November the company's budgeted production was 5,300 units, but the actual production was 5,100 units. The company used 1,650 direct labor-hours to produce this output. The actual variable overhead cost was $7,590. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead efficiency variance for November is:

• A) $552 U
• B) $600 U
• C) $600 F
• D) $552 F

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Definitions:

Budgeted Accounts Receivable

The forecasted amount of money owed to a business by its customers for goods or services provided on credit.

Credit Sales

Sales for which payment is not received at the time of sale but is expected to be paid at a later date.

Budgeted Accounts Receivable

Forecasted or estimated amounts that a business expects to receive from customers for credit sales.

Credit Sales

Sales made by a business where payment is delayed as per agreed terms, allowing the customer to pay at a later date.