The Dillon Company Makes and Sells a Single Product and Uses

question 14

Multiple Choice

The Dillon Company makes and sells a single product and uses a flexible budget for overhead to plan and control overhead costs. Overhead costs are applied on the basis of direct labour hours. The standard cost card shows that 5 direct labour hours are required per unit. The Dillon Company had the following budgeted and actual data for March:
$\begin{array} { | l | r | r | } \hline & \text { Actual } & \text { Budgeted } \\\hline \text { Units Produced } & 33,900 & 30,800 \\\hline \text { Direct Labour Hours } & 161,800 & 154,000 \\\hline \text { Variable Overhead Costs } & \$ 140,500 & \$ 123,200 \\\hline \text { Fixed Overhead Costs } & \$ 80,000 & \$ 77,000 \\\hline\end{array}$


-What was the fixed overhead budget variance for March?

• A) $900 favourable.
• B) $3,000 unfavourable.
• C) $3,900 favourable.
• D) $7,750 favourable.

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Definitions:

Corpus Callosum

A large band of neural fibers connecting the two cerebral hemispheres, facilitating communication between them.

Midbrain

The middle portion of the brainstem, involved in vision, hearing, motor control, sleep/wake, arousal, and temperature regulation.

Sheep Brain

An animal brain commonly used in educational dissection classes to study the anatomy and function of the brain due to its similarity to the human brain.

Corpus Callosum

A large band of neural fibers connecting the two cerebral hemispheres and facilitating interhemispheric communication.