Quality Brand Products Uses Standard Costing to Manage Their Direct

question 104

Multiple Choice

Quality Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Quality Brand had an unfavorable cost variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?

• A)The actual number of direct labor hours was lower than the budgeted hours.
• B)The actual variable overhead costs were higher than the budgeted costs.
• C)The actual variable overhead costs were lower than the budgeted costs.
• D)The actual number of direct labor hours was higher than the budgeted hours.

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Definitions:

Employment

The condition of having paid work or the number of people within an economy who are currently employed.

Net Taxes

Refers to the total amount of taxes paid by businesses and individuals to the government, minus any refunds, credits, or benefits received, representing the actual tax burden.

Disposable Income

The amount of money a household or individual has available to spend or save after taxes have been deducted.

Government Expenditure

The total amount of money spent by the government on various services and investments.