Raff Co Has a Standard Cost System in Which Manufacturing Overhead

question 61

Multiple Choice

Raff Co. has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour hours (DLHs) . The following standards are based on 100,000 direct labour hours:
$\begin{array}{l|l|}\hline \text { Variable Overhead } & 2 \text { DLHs @ \$3 per DLH }=\$ 6 \text { per unit } \\\hline \text { Fixed Overhead } & 2 \text { DLHs @ \$4 per DLH }=\$ 8 \text { per unit } \\\hline\end{array}$
The following information pertains operations during March:
$\begin{array}{|l|r|}\hline \text { Units Actually Produced } & 38,000 \\\hline \text { Actual Direct Labour Hours Worked } & 80,000 \\\hline\end{array}$

$\begin{array}{|l|r|}\hline \text { Actual Manufacturing Overhead Incurred: } & \\\hline \text { Variable Overhead } & \$ 250,000 \\\hline \text { Fixed Overhead } & \$ 384,000 \\\hline\end{array}$
-For March,what was the variable overhead spending variance?

• A) $6,000 favourable.
• B) $10,000 unfavourable.
• C) $12,000 unfavourable.
• D) $22,000 favourable.

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Definitions:

Piagetian Period

Stages of cognitive development identified by psychologist Jean Piaget, through which children progress as they grow older.

Preconventional Morality

The first level in Kohlberg's stages of moral development, where behavior is driven by the desire to avoid punishment or gain reward.

Sensorimotor Period

The first stage of Jean Piaget's theory of cognitive development, occurring from birth to approximately two years of age, where an infant's knowledge of the world is limited to their sensory perceptions and motor activities.

Preconventional Level

The first level of Kohlberg's stages of moral development, where an individual's moral reasoning is based primarily on the consequences of actions and on rewards and punishments.