Frogue Corporation Uses a Standard Cost System Refer to the Information Provided for Frogue Company

question 111

Multiple Choice

Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended: $\begin{array}{ll}\$ 2.50 & \text { Actual price per kilogram } \\31,000 & \text { Actual lilograms of material used } \\\$ 18.10 & \text { Actual hourly labor rate } \\4.900 \text { lahor hrs } & \text { Actual hmurs of morhuction }\\\$ 2.80 & \text { Standard price per kilogram } \\6 \text { kilograms } & \text { Standard kilograms per completed urit } \\\$ 18.00 & \text { Standard hourly labor rate } \\1 \text { hr. } & \text { Standard time per completed urit } \\\$ 34,900 & \text { Actual total factory overhead }\\\$ 18,000 & \text { Actual fixed factory overhead } \\\$ 1.20 \text { per labor hour } & \text { Standard fixed factory overhead rate } \\\$ 3.80 \text { per labor hour } & \text { Standard variable factory overhead rat } \\15,000 \text { hours } & \text { Maximum plant capacity } \\5,000 & \text { Units completed churing the period }\end{array}$

Refer to the information provided for Frogue Company. The total factory overhead cost variance is:

• A) $3,900 favorable.
• B) $10,400 favorable.
• C) $10,400 unfavorable.
• D) $9,900 unfavorable.

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Definitions:

Onerous Contract

A contract where the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received from it.

Unavoidable Costs

Costs that cannot be eliminated, reduced, or postponed, and must be incurred regardless of specific business decisions or changes in operations.

Present Value Method

A technique used to determine the present value of future cash flows or income streams to evaluate investment projects or financial products.

Net Market Value

The amount that could be obtained from selling an asset in the market after deducting any selling costs or liabilities.