Cavalaris Products Uses a Standard Cost System

question 134

Multiple Choice

Cavalaris Products uses a standard cost system.Overhead costs are allocated based on direct labor hours.In the first quarter,Cavalaris had an unfavorable cost 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:

Principle of Conservation

A concept in cognitive development theory that an object's volume, mass, or quantity remains the same despite changes in its shape or form, usually understood by children during the concrete operational stage.

Quantity of a Substance

The quantity of a substance refers to the amount or number of units of that substance, which can be measured in various units depending on the physical property being observed.

Shape Change

The process of an object or entity altering its form, structure, or outline.

Mutual Adjustment

A process of communication and negotiation between parties to adapt to each other's needs or actions.