Jewel Company Calculates Its Predetermined Rates Using Practical Volume, Which

question 7

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 fixed overhead spending variance?

• A)$0
• B)$28,000 U
• C)$28,000 F
• D)$32,000 U

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Definitions:

Porosity

The measure of a rock's ability to hold water, determined by the volume of voids or spaces within the rock.

Artesian Aquifer

A confined aquifer containing groundwater under positive pressure, causing water to rise above the surrounding water table when tapped.

Confined Aquifer

A confined aquifer is a water-bearing stratum of permeable rock, sand, or gravel that is trapped between layers of impermeable rock and is under pressure.

Perched Aquifer

A perched aquifer is a groundwater body that sits above the main water table, separated by a layer of impermeable rock or sediment, typically providing a limited and localized water source.