The Upton Company Employs a Standard Costing System in Which

question 67

Multiple Choice

The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following:
$\begin{array} { | l | r | } \hline \text { Variable manufacturing overhead cost incurred } & \$ 48,700 \\\hline \text { Total variable overhead variance } & \$ 300 \text { favourable } \\\hline \text { Standard hours allowed for actual production } & 7,000 \\\hline \text { Actual direct labour hours worked } & 6,840 \\\hline\end{array}$

-What is the standard variable overhead rate per direct labour hour?

• A) $6.91.
• B) $6.95.
• C) $7.00.
• D) $7.12.

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Definitions:

Labor Market

Refers to the supply and demand for work, in which employers seek employees, and individuals seek employment.

Production Capacity

The maximum amount of goods that can be produced or services that can be provided over a specified period under normal working conditions.

Inventory

The goods or materials that a business holds for the ultimate goal of resale, production, or utilization in operations.

Flexible Work Hours

An employment arrangement that allows employees to choose their work hours within certain limits, promoting work-life balance.