Jewel Company Calculates Its Predetermined Rates Using Practical Volume, Which

question 115

Multiple Choice

Jewel Company calculates its predetermined rates using practical volume, which is 300,000 units. The standard cost system allows two direct labour hours per unit produced. Overhead is applied using direct labour hours. The total budgeted overhead is $3,200,000 of which $900,000 is fixed overhead. The actual results for the year are as follows:
$\begin{array}{ll}\text { Units produced: } & 280,000 \\\text { Direct labour: } & 570,000 \text { hours }@\$ 9 \text { per hour } \\\text { Variable overhead: } & \$ 2,320,000 \\\text { Fixed overhead: } & \$ 872,000\end{array}$
-Refer to the Figure.What is the variable overhead spending variance?

• A)$24,000 U
• B)$24,000 F
• C)$136,900 U
• D)$136,900 F

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Definitions:

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, operant conditioning involves an association between behaviors and their consequences.

Reinforcement

In behaviorism, any event that strengthens or increases the likelihood of a behavior.

Fixed-Interval Schedules

A schedule of reinforcement where rewards are provided after a fixed amount of time has passed since the last reinforcement.

Variable-Interval Schedules

A reinforcement schedule in operant conditioning where responses are rewarded after an unpredictable amount of time has passed.