Gina Production Company Uses a Standard Costing System

question 130

Multiple Choice

Gina Production Company uses a standard costing system. The following information pertains to 2011. The factory overhead rate is based on an activity level of 10,000 hours. Standard cost data for 5,000 units is as follows:
What is the variable overhead efficiency variance for Gina Production Company?

• A) $562.50 F
• B) $3,000.00 U
• C) $562.50 U
• D) $1,687.50 F

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Definitions:

Difference Threshold

The minimum difference in stimulation that a person can detect 50 percent of the time.

Relative Magnitude

The comparison of the size, extent, or importance of something in relation to another.

Difference Threshold

The least variation in stimulation that an individual is able to recognize 50% of the occasions, commonly termed as the just noticeable difference (JND).

Marginal Intensity

Marginal intensity refers to the change in the level of intensity or satisfaction gained from consuming an additional unit of a resource or performing an additional unit of activity.