Jay Company Uses a Standard Cost System in Which It

question 78

Multiple Choice

Jay Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs) . The information below pertains to a recent month's activity: The volume variance would be:

• A)$300 F
• B)$300 U
• C)$150 F
• D)$180 F

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used in budgeting and assessing performance by comparing them to actual costs.

Inventory Decrease

A reduction in the quantity of goods held in stock by a business.

Performance Measures

are metrics used to evaluate the efficiency, effectiveness, and productivity of an operation, employee, or process.

Interest Expense

The cost incurred by an entity for borrowed funds, paid as interest to lenders or creditors.