During the Year, Hawkings Produced 10,000 Units, Used 20,000 Direct

question 64

Multiple Choice

During the year, Hawkings produced 10,000 units, used 20,000 direct labor hours, and incurred variable overhead of $90,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.00 per direct labor hour. The variable overhead spending variance is

• A) $2,000 F.
• B) $6,000 U.
• C) $10,000 U.
• D) $2,000 U.
• E) None of these.

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Definitions:

Unit Cost

The cost incurred to produce, store, or purchase one unit of a product or service.

Modifying Style

Refers to altering the presentation or appearance of a document or webpage through changes in formats, layouts, or designs.

Make-Or-Buy Options

Decision-making process in businesses regarding whether to produce a product or service in-house or to purchase it from an external supplier.

Excess Productive Capacity

The ability of a firm to produce more than is required at the current level of demand, often leading to underutilization of resources.