A Manufacturing Company That Has Only One Product Has Established

question 196

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses machine hours as its measure of activity.
$\begin{array}{|l|r|}\hline \text { Standard Hours per Unit of Output } & 8.1 \text { machine hours } \\\hline \text { Standard Variable Overhead Rate } & \$ 14.30 \text { per machine hour } \\\hline\end{array}$
The following data pertain to operations for the last month:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 1,700 \text { machine hours } \\\hline \text { Actual Total Variable Overhead Cost } & \$ 24,905 \\\hline \text { Actual Output } & 200 \text { units } \\\hline\end{array}$
-What was the variable overhead spending variance for the month?

• A) $595 favourable.
• B) $595 unfavourable.
• C) $1,739 favourable.
• D) $1,739 unfavourable.

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Definitions:

Apparent Power

The total power in an AC circuit, represented as the product of the circuit's voltage and current, without taking phase difference into account.

Wye-Connected

A method of connecting electrical components where three components are connected at a single point, resembling the letter Y, to balance the load.

Phase Voltages

The voltages that exist between each phase and neutral in a polyphase system, such as those found in three-phase electrical systems.

Inductors

Components in an electrical circuit designed to add inductance, typically consisting of a coil of conducting wire.