The Dillon Company Makes and Sells a Single Product and Uses

question 33

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 volume variance for March?

• A) $1,550 favourable.
• B) $3,900 unfavourable.
• C) $7,750 favourable.
• D) $7,750 unfavourable.

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Definitions:

Negotiator

A negotiator is someone who is involved in discussions aimed at reaching an agreement or resolving a dispute, possessing skills in communication, persuasion, and strategy.

Trust

A firm belief in the reliability, truth, ability, or strength of someone or something.

Enlightened Self-Interest

A philosophy where individuals act in ways that benefit others because they understand that these actions are ultimately in their own best interest.

Block

To obstruct or prevent action or progress in a negotiation or any process.