Franklin Glass Works Uses a Standard Cost System in Which

question 70

Multiple Choice

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour-hours. Each unit requires two standard hours of labour for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at £900,000 for the year, and the fixed overhead rate was £3.00 per unit. The actual data pertaining to the manufacturing overhead for the year are presented below: $$\begin{array} { l l } \text { Actual production } & 198,000 \text { units } \\\text { Actual direct labour-hours } & 440,000 \text { direct labour-hours } \\\text { Actual variable overhead } & £ 352,000 \\\text { Actual fixed overhead } & £ 575,000\end{array}$$
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Franklin's variable overhead efficiency variance for the year is

• A)£33,000 unfavourable.
• B)£35,200 favourable.
• C)£35,200 unfavourable.
• D)£33,000 favourable.

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Definitions:

Conjunctive Task

A task in which the performance of the group is determined by the performance of the least efficient member.

Disjunctive Task

A type of group task where the success of the group depends on the performance of the most skilled or knowledgeable member.

Social Psychology

The scientific study of how individuals think, feel, and behave in social contexts, including how people influence and interact with each other.

Performance Standard

A predefined benchmark or set of criteria used to evaluate and measure the performance or quality of work.