Luka Company Uses the Following Overhead Standard Costs for a Single

question 118

Multiple Choice

Luka Company uses the following overhead standard costs for a single unit of product: 7.5 hours at $13.50 per hour.Actual data for the month showed overhead costs of $132,000 for 1,800 units produced.What is the difference between actual overhead costs and standard overhead costs allocated to products?

• A)$107,700 favorable
• B)$107,700 unfavorable
• C)$50,250 favorable
• D)$50,250 unfavorable

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Definitions:

Globalization on Business

The impact of increasing global interconnectivity on business operations, including expanded markets, diversified supply chains, and increased competition.

Just-In-Time (JIT)

A supply chain management strategy that aims to reduce inventory costs by receiving goods only as they are needed in the production process.

Manufacturing Company

A company that produces finished goods from raw materials through the use of labor and machinery.

Performance Reports

Documents that compare actual performance with budgeted or planned performance in various areas of an organization.