A Manufacturing Company That Has Only One Product Has Established

question 93

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses direct labour hours (DLHs) as its measure of activity.
$\begin{array}{|l|r|}\hline \text { Standard Hours per Unit of Output } & 7.2 \mathrm{DLHs} \\\hline \text { Standard Variable Overhead Rate } & \$ 14.20 \text { per DLH } \\\hline\end{array}$
The following data pertain to operations for the last month:
$\begin{array}{|l|r|}\hline \text { Actual Direct Labour Hours } & 5,100 \text { DLHs } \\\hline \text { Actual Total Variable Overhead Cost } & \$ 72,165 \\\hline \text { Actual Output } & 600 \text { units } \\\hline\end{array}$
-What was the variable overhead spending variance for the month?

• A) $255 favourable.
• B) $255 unfavourable.
• C) $10,821 favourable.
• D) $10,821 unfavourable.

---

Definitions:

Fertility

The natural capability to produce offspring; it is a measure of reproductive capability in individuals or populations.

Decline

A gradual decrease in quality, quantity, health, or strength of something or someone.

Kohlberg

A psychologist known for his theory of moral development, which explains how individuals evolve their understanding of morality.

Preconventional Morality

The first stage of moral development in Kohlberg's theory, where behavior is guided by punishments and rewards from the external environment.