Armstrong Products Refer to the Armstrong Products Information Below

question 37

Multiple Choice

Armstrong Products
Refer to the Armstrong Products information below.
Armstrong Products applies fixed overhead at a rate of $3 per direct labour hour. Each unit produced is expected to take 2 direct labour hours. Armstrong expected production in the current year to be 10 000 units but 9000 units were actually produced. Actual direct labour hours were 19 000 and actual fixed overhead costs were $62 000.
-Armstrong's fixed overhead spending variance is:

• A) $8000 F
• B) $8000 U
• C) $2000 F
• D) $2000 U

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Definitions:

Loan Repayment

The process of paying back borrowed money, typically consisting of principal and interest components, over an agreed period.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Foreign Exchange Gain

A profit arising from fluctuations in the value of foreign currencies relative to one's home currency.

Exchange Rates

The pace at which one form of currency can be swapped for another, affecting international commerce and investments.