Jessep Corporation Has a Standard Cost System in Which Manufacturing

question 222

Multiple Choice

Jessep Corporation has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour hours. The company has provided the following data concerning its fixed manufacturing overhead costs in March:
$\begin{array} { | l | r | } \hline \text { Denominator Hours } & 15,000 \text { hours } \\\hline \text { Actual Hours Worked } & 14,000 \text { hours } \\\hline \text { Standard Hours Allowed for the Output } & 12,000 \text { hours } \\\hline \text { Flexible Budget Fixed Overhead Cost } & \$ 45,000 \\\hline \text { Actual Fixed Overhead Costs } & \$ 48,00 \\\hline\end{array}$


-What was the fixed overhead budget variance?

• A) $1,000 unfavourable.
• B) $2,000 favourable.
• C) $2,000 unfavourable.
• D) $3,000 unfavourable.

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Definitions:

Paradox

A statement or situation that despite sound reasoning from acceptable premises, leads to a conclusion that seems senseless, logically unacceptable, or self-contradictory.

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The act of making deliberate and aware decisions regarding purchases or other life choices.

Subjectively Selecting

The process of choosing or making decisions based on personal feelings, tastes, or opinions rather than external evidence or criteria.

Subconsciously Selecting

The process by which individuals make choices or decisions without conscious awareness.