Point Company Uses the Standard Costing Method

question 9

Multiple Choice

Point Company uses the standard costing method. The company's main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year were $6,750. During the year, the company produced and sold 8,000 units. Actual fixed overhead costs were $4,800. Compute the fixed overhead volume variance.

• A) $300 (F)
• B) $300 (U)
• C) $1,950 (U)
• D) $2,250 (U)

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Definitions:

Stroboscopic Movement

an optical illusion in which continuous motion is represented by a series of short or instantaneous samples, as seen in motion pictures.

Retinal Disparity

The slight difference in visual perception from each eye, contributing to depth perception and the understanding of three-dimensional space.

Basilar Membrane

A critical structure within the inner ear contributing to the mechanism of hearing by converting sound vibrations into neural signals.

Cochlea

A spiral-shaped, fluid-filled inner ear structure essential for converting sound waves into electrical impulses for hearing.