Cheapo Sales Company Uses a Standard Cost System

question 167

Multiple Choice

Cheapo Sales Company uses a standard cost system.Overhead costs are allocated based on direct labor hours.In the first quarter,Cheapo Sales had a favorable efficiency variance for variable overhead costs.Which of the following scenarios is a reasonable explanation for this variance?

• A) The actual number of direct labor hours was lower than the budgeted hours.
• B) The actual variable overhead costs were higher than the budgeted costs.
• C) The actual variable overhead costs were lower than the budgeted costs.
• D) The actual number of direct labor hours was higher than the budgeted hours.

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Definitions:

Aboriginal People

Indigenous peoples native to a land or region, especially those who were inhabiting a country prior to colonization.

Internal Colonialism

The exploitation and domination of minority groups within a country, similar to colonialism but occurring within national borders.

Colonialism

The strategy or method of gaining complete or partial political power over a different nation, settling it with inhabitants, and utilizing it for economic gain.

Nineteenth Century

The period ranging from January 1, 1801, to December 31, 1900, marked by significant social, economic, and technological changes worldwide.