Galla Corporation Makes a Product with the Following Standard Costs

question 26

Multiple Choice

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2, 400 units in June, but actual production was 2, 500 units.The company used 19, 850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21, 700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 per hour. 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 June is:

• A)$36 U
• B)$36 F
• C)$40 U
• D)$40 F

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Definitions:

Multinational Corporation

A large company that operates and provides goods or services in multiple countries beyond its original country of establishment, often exercising significant economic and political influence globally.

Branch Plant

A factory or office operated in a country by a foreign company, often perceived as a subordinate extension of its parent company.

Collateral Labour Markets

Secondary or peripheral segments of the labour market characterized by lower job security, lower wages, and less formal employment structures.

Unions

Are organizations of workers that seek to defend and promote their members’ interests.