The Standard Number of Direct Labor Hours Used in Calculating

question 149

Multiple Choice

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

• A)the static budget.
• B)the actual number of finished units produced.
• C)the number of units on the production budget.
• D)the number of

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Definitions:

Manufacturing Overhead Cost

Expenses related to the manufacturing process that are not directly tied to the production of goods, such as utilities and rent for the manufacturing facilities.

Actual Output

refers to the actual quantity of goods or services produced by a business within a given period.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products based on a relevant activity base, such as labor hours.

Indirect Labor

Workers or labor costs that support the production process but are not directly involved in the creation of the product.