Eliezrie Corporation Makes a Product with the Following Standard Costs

question 62

Multiple Choice

Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for January is:

• A)$836 F
• B)$836 U
• C)$880 F
• D)$880 U

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Definitions:

Rights Offering

An issue of rights to existing shareholders allowing them to buy additional shares directly from the company at a discount before a public offering.

Seasoned Issue

A new offering of stock to the public from a company that has previously issued securities to the public.

Indirect Costs

Costs that are not directly tied to a specific project or product, such as administration, personnel and security costs.

Direct Costs

Expenses that can be directly linked to the production of a specific good or service, such as raw materials and labor.