(Appendix 11A)Derf Corporation Uses a Standard Cost System in Which

question 93

Multiple Choice

(Appendix 11A) Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours.Two direct labor-hours are required for each unit produced.The denominator activity was set at 9, 000 units.Manufacturing overhead was budgeted at $135, 000 for the period;20 percent of this cost was fixed.The 17, 200 hours worked during the period resulted in production of 8, 500 units.Variable manufacturing overhead cost incurred was $108, 500 and fixed manufacturing overhead cost was $28, 000. The fixed manufacturing overhead volume variance for the period was:

• A)$750 Unfavorable
• B)$2, 500 Unfavorable
• C)$1, 500 Unfavorable
• D)$1, 000 Unfavorable

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Definitions:

Oral Agrees

Agreements or contracts made through spoken communication rather than written, subject to certain legal limitations.

Consequential Damages

Indirect losses that arise not directly from a breach of contract but as a foreseeable result of the breach.

Compensatory Damages

Monetary compensation awarded to a plaintiff to offset losses or injuries that have occurred due to another's wrongdoing.

Punitive Damages

Monetary compensation awarded in a lawsuit over and above actual damages, intended to punish the defendant for egregious conduct.