Suppose a Company's Variable Manufacturing Overhead Is Applied on the Basis

question 143

Multiple Choice

Suppose a company's variable manufacturing overhead is applied on the basis of direct labour hours,and the company has an unfavourable direct labour efficiency variance.Which of the following is most likely to result?

• A)The direct materials usage variance will be unfavourable.
• B)The direct labour rate variance will be favourable.
• C)The variable manufacturing overhead efficiency variance will be unfavourable.
• D)The variable manufacturing overhead spending variance will be unfavourable.

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Definitions:

Tax System

The comprehensive set of laws and regulations governing the collection of taxes by the government from individuals and businesses.

Average Tax Rate

Total taxes paid divided by total income

Taxable Income

The amount of income used to determine how much tax an individual or a company owes to the government in a given tax year.

Lump-Sum Taxes

Taxes with a fixed amount, not dependent on the taxpayer's income level or economic activity, making them neither progressive nor regressive.