Jaune Company Uses a Standard Cost System That Applies Manufacturing

question 29

Multiple Choice

Jaune Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs) .The following data pertain to last month's operations:
What was the fixed overhead budget variance?

• A) $500 favourable.
• B) $500 unfavourable.
• C) $1,700 unfavourable.
• D) $2,200 unfavourable.

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Definitions:

Required Return

The smallest percentage of annual gain required from an investment to attract individuals or corporations to fund a certain project or venture.

Wealth

The abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions.

Discounted Payback

The period of time it takes for the sum of the discounted cash flows to pay back the initial investment.

Payback

The amount of time it takes for an investment to generate enough returns to recover the original investment cost.