A Company Uses "Standard Costing

question 22

Multiple Choice

A company uses "Standard Costing".If the standard variable cost of making one unit is £0.32 and the budgeted production is 10,000 units but company produced 12,000 units,the expected variable cost would be:

• A) £3,200
• B) £0.32
• C) £3,840
• D) £640

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Definitions:

Variable Manufacturing Overhead

Costs that vary with the level of production output, such as utilities or commissions, which are indirectly associated with the manufacturing of products.

Total Variable Overhead Variance

Total variable overhead variance is the difference between the actual variable overhead costs incurred and the expected costs based on a standard cost model, indicating inefficiencies in production.

Variable Manuf. Overhead

Costs that vary with the level of production output and are related to the manufacturing process but cannot be directly traced to individual units produced.

Direct Materials

Raw materials that are directly incorporated into a finished product and are easily traceable to it.