The Standard Variable Overhead Cost Rate for the Croskey Company

question 117

Multiple Choice

The standard variable overhead cost rate for the Croskey Company is $12 per unit.Budgeted fixed overhead cost is $60,000.The Croskey Company budgeted 4,000 units for the current period and actually produced 3,860 finished units.What is the production volume variance?
Assume the allocation base for fixed overhead costs is the number of units expected to be produced.

• A)$3,780 favourable
• B)$2,100 unfavourable
• C)$2,100 favourable
• D)$3,780 unfavourable

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Definitions:

Degrees of Freedom

Degrees of freedom refer to the number of values in a statistical calculation that are free to vary without violating the constraints of the calculation.

Population Standard Deviation

A measure of the dispersion or variability within a population data set, indicating how spread out the data points are from the mean.

Interval Estimate

An estimate of a population parameter that gives an interval believed to contain the parameter.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution without violating any constraints.