If Overhead Is Applied to Production Using Direct Labor Hours

question 20

Multiple Choice

If overhead is applied to production using direct labor hours and the direct labor efficiency variance is favorable, then the variable overhead efficiency variance is:

• A) favorable.
• B) unfavorable.
• C) either favorable or unfavorable.
• D) neither favorable nor unfavorable.

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Definitions:

Aircraft Products Division

A specialized division within a company that focuses on the design, manufacture, and sale of aircraft and related products.

Antennae Division

The Antennae Division could denote a specialized segment within a company focused on the development, production, or distribution of antennae and related technologies; however, without context, its specific definition may vary.

Transfer Price

The price at which goods and services are sold between divisions within the same company or among affiliated companies.

Contribution Margin

The amount by which a product's sales revenue exceeds its variable costs, indicating how much contributes to covering fixed costs and generating profit.