A Manufacturing Company That Has Only One Product Has Established

question 386

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours. The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

• A)$1,172 F
• B)$567 F
• C)$1,172 U
• D)$1,144 U

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Definitions:

Net Present Value Analysis

A method used in capital budgeting to evaluate the profitability of an investment or project by computing the present values of all cash flows related to it.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Annuity

A financial instrument that provides a consistent series of payments to a person, often utilized as a source of income for retired individuals.

Equivalent Cash Flows

Streams of equal value cash flows occurring at regular intervals.