Discount Sales Company Uses a Standard Cost System

question 65

Multiple Choice

Discount Sales Company uses a standard cost system.Variable overhead costs are allocated based on direct labor hours.In the first quarter,Discount Sales had a favorable 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:

Perennial Herbaceous Plants

Plants that live for more than two years, lacking woody stems, and dying back at the end of the growing season only to regrow from the same root system.

Scramble Competition

See Exploitation Competition.

Intraspecific

Pertaining to interactions or relationships occurring within the same species, such as competition or mating.

Negative Feedback

A regulatory mechanism in which a stimulus causes an opposite output in order to maintain an optimal level of whatever is being regulated.