The Upton Company Employs a Standard Costing System in Which

question 99

Multiple Choice

The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following:
$\begin{array} { | l | r | } \hline \text { Variable manufacturing overhead cost incurred } & \$ 48,700 \\\hline \text { Total variable overhead variance } & \$ 300 \text { favourable } \\\hline \text { Standard hours allowed for actual production } & 7,000 \\\hline \text { Actual direct labour hours worked } & 6,840 \\\hline\end{array}$

-What was the variable overhead spending variance?

• A) $740 favourable.
• B) $740 unfavourable.
• C) $820 favourable.
• D) $820 unfavourable.

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Definitions:

Taxes

Necessary financial levies or assorted kinds of dues imposed on an individual by a governmental structure to facilitate government finance and numerous public investments.

Deadweight Loss

A decrease in economic productivity that happens when a good or service does not reach or cannot reach its equilibrium state.

Tax

Mandatory charges imposed by governments on individuals or entities to fund public services and goods.

Deadweight Loss

An economic inefficiency resulting from a market not reaching equilibrium, where potential gains from trade are not fully realized.