Use the Following Information to Answer the Next Question(s)

question 94

Multiple Choice

Use the following information to answer the next question(s) :
The standard cost sheet for one of the Vitton Company's products is presented below.
*Rate based on expected activity of 12,000 hours
The following results for last year were recorded.

-The variable overhead efficiency variance is

• A) $2,500 favourable.
• B) $2,500 unfavourable.
• C) $2,250 favourable.
• D) $2,250 unfavourable.

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset, which involves evenly spreading the cost of the asset over its useful life.

Annual Average Investment

The average amount invested over a certain period, typically calculated for evaluating investment performance.

Profitability Index

The profitability index measures the relationship between the present value of future cash flows and the initial investment.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.