The Phelps Company Applies Overhead Costs to Products on the Basis

question 27

Multiple Choice

The Phelps Company applies overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. Phelps Company had the following budgeted and actual data for March: The budgeted direct labor-hours is used as the denominator activity for the month.
-The fixed manufacturing overhead budget variance for March is:

• A)$2,000 favorable
• B)$500 favorable
• C)$2,000 unfavorable
• D)$2,500 favorable

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Definitions:

Overload Theory

A concept in psychology and organizational behavior referring to the state where an individual or system is overwhelmed by tasks or information, leading to reduced performance or stress.

Home Field Disadvantage

The phenomenon where teams or individuals perform worse in their own environment or venue, contrary to the expected home field advantage.

Hostile Surroundings

Environments characterized by antagonism or adversity that can impact individuals' performance and well-being.

Supportive

Providing encouragement, comfort, or assistance, often in a context of a relationship, group, or social setting.