Cheapo Sales Company Uses a Standard Cost System

question 167

Multiple Choice

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

Durkheim

Emile Durkheim, a founding figure in sociology, known for his works on the social causes of suicide, the functions of religion, and the concept of the social fact.

Egoistic Suicide

A concept in sociology, described by Emile Durkheim, referring to the act of taking one's own life due to a lack of social integration and a sense of not belonging.

Anomic Suicide

The type of suicide occurring when there are disintegrating forces in the society that make individuals feel lost or alone.

Labeling Theory

A sociological theory suggesting that deviance and conformity result not so much from what people do but from how others respond to those actions.