Franklin Glass Works Uses a Standard Cost System in Which

question 61

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: $$\begin{array} { l l } \text { Actual production } & 198,000 \text { units } \\\text { Actual direct labour-hours } & 440,000 \text { direct labour-hours } \\\text { Actual variable overhead } & £ 352,000 \\\text { Actual fixed overhead } & £ 575,000\end{array}$$
-Franklin's fixed overhead budget variance for the year is

• A)£19,000 favourable.
• B)£25,000 favourable.
• C)£25,000 unfavourable.
• D)£19,000 unfavourable.

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Definitions:

Rational Autonomous Agent

An individual or entity capable of making their own choices based on reasoning and logic, independent of external control.

Ethical Decisions

Choices made based on moral principles and values, considering what is right and wrong.

Conflicting Duties

Situations where an individual or organization faces two or more obligations that are difficult to fulfill simultaneously due to their opposing natures.

Ethical Dilemma

A situation where a person must choose between two morally correct actions that conflict.