Jessep Corporation Has a Standard Cost System in Which Manufacturing

question 222

Multiple Choice

Jessep Corporation has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour hours. The company has provided the following data concerning its fixed manufacturing overhead costs in March:
$\begin{array} { | l | r | } \hline \text { Denominator Hours } & 15,000 \text { hours } \\\hline \text { Actual Hours Worked } & 14,000 \text { hours } \\\hline \text { Standard Hours Allowed for the Output } & 12,000 \text { hours } \\\hline \text { Flexible Budget Fixed Overhead Cost } & \$ 45,000 \\\hline \text { Actual Fixed Overhead Costs } & \$ 48,00 \\\hline\end{array}$


-What was the fixed overhead budget variance?

• A) $1,000 unfavourable.
• B) $2,000 favourable.
• C) $2,000 unfavourable.
• D) $3,000 unfavourable.

---

Definitions:

Coupon Rate

The annual interest rate paid by bond issuers on the bond's face value.

Duration

A financial metric that indicates the sensitivity of a bond's price to changes in interest rates, commonly measured in years.

Par-Value

Par-value is the legal capital per share, established for stocks and bonds, representing a minimal value below which shares cannot be issued.