If a Company That Applies Variable Overhead on the Basis

question 53

Multiple Choice

If a company that applies variable overhead on the basis of direct labor hours records an unfavorable direct labor efficiency variance,the variable overhead efficiency variance will be

• A)unfavorable.
• B)favorable.
• C)zero.
• D)undeterminable.

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Definitions:

Separate Disclosures

Financial reporting that requires specific financial statements or items to be presented separately to provide clarity and detail.

Total Revenues

The sum of money received from selling goods or services which are the main activities of a business.

Cost Method

An accounting method used to value investments, where the investment is recorded at cost and adjusted only for impairments.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but does not have full control or majority ownership.