Termeer Inc

question 6

Multiple Choice

Termeer Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for August:

-The variable overhead efficiency variance for the month is closest to:

• A) $46 U
• B) $42 F
• C) $46 F
• D) $42 U

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Definitions:

Activity Rates

Rates used in activity-based costing to allocate indirect costs to specific products or services based on the activities required to produce them.

Activity Levels

Varying levels of operational or production activity in a company, which can affect budgets and costs.

Cost Pools

Cost pools are groupings of individual costs in an accounting system, categorized according to the process that incurred the cost, used to allocate costs effectively to products or services.

Activity-Based Costing

A costing method that allocates overhead and indirect costs to specific activities related to production, providing more accurate product costing.