Smithville Uses Labor Hours to Apply Variable Overhead to Production

question 71

Multiple Choice

Smithville uses labor hours to apply variable overhead to production. If the company's workers were very inefficient during the period, which of the following statements would be true about the variable-overhead efficiency variance?

• A) The variance would be favorable.
• B) The variance would be unfavorable.
• C) The nature of the variance (favorable or unfavorable) would be unknown based on the facts presented.
• D) The variance would be the same amount as the labor efficiency variance.
• E) None of the other answers are correct.

---

Definitions:

Latent Content

In psychoanalytic theory, the hidden psychological meaning of dreams, as distinct from their manifest content or storyline.

Erogenous Zone

Areas of the human body that are particularly sensitive to stimulation and can lead to sexual arousal when touched or stimulated.

Psychosexual Stage

Periods in Sigmund Freud's theory during which a child's pleasure-seeking energies focus on specific areas of the body leading to personality development.

Displacement

A defense mechanism where emotional impulses are redirected from the original source to a non-threatening target.