Underfoot Products Uses Standard Costing Compute the Variable Overhead Variance

question 21

Multiple Choice

Underfoot Products uses standard costing. The following information about overhead was generated during May: $\begin{array}{ll}\text { Standard variable overhead rate } & \$ 2 \text { per machine hour } \\\text { Standard fixed overhead rate } & \$ 1 \text { per machine hour } \\\text { Actual variable overhead costs } & \$ 382,000 \\\text { Actual fixed overhead costs } & \$ 175,000 \\\text { Budgeted fixed overhead costs } & \$ 190,000 \\\text { Standard machine hours per unit produced } & 10 \\\text { Good units produced } & 18,000 \\\text { Actual machine hours } & 200,000\end{array}$ Compute the variable overhead variance.

• A) $42,000 (F)
• B) $42,000 (U)
• C) $22,000 (U)
• D) $32,000 (F)

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Definitions:

Cause Stress

Factors or situations that induce a physical or emotional strain or tension in individuals.

Locus of Control

An individual's belief about the extent to which their actions can influence the events and outcomes in their lives.

Broad Preferences

General or overarching choices or inclinations that an individual or group may have.

Geert Hofstede

A Dutch social psychologist who is known for his research on cross-cultural groups and organizations, particularly for developing cultural dimensions theory.