Dooley Company Has the Following Information Available for Variable Overhead

question 94

Multiple Choice

Dooley Company has the following information available for variable overhead costs.Direct labor hours are the cost driver for variable overhead costs.
$\begin{array}{ll}\text { Actual variable overhead costs } & \$ 4,700 \\\text { Standard variable overhead costs } & \$ 1.20 \text { per hou1 } \\\text { Actual direct labor hours } & 3,750 \text { hours } \\\text { Standard direct labor hours per unit } & 5 \text { hours } \\\text { Units produced } & 700\end{array}$
What is the variable overhead efficiency variance?

• A) $300 Favorable
• B) $300 Unfavorable
• C) $500 Favorable
• D) $500 Unfavorable

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Definitions:

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Marginal Cost

The added financial burden incurred by manufacturing one more good or service unit.

Government Rules

Regulations and guidelines established by government authorities to govern behavior, enforce standards, and protect the public interest.

Economies Of Scale

The cost per output unit tends to decrease as the operational scale increases, providing companies with financial advantages due to their size.