A Manufacturing Company Uses a Standard Costing System in Which

question 29

Multiple Choice

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The variable overhead efficiency variance for the period is closest to:

• A)$300 F
• B)$1,465 U
• C)$1,760 U
• D)$1,775 U

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Definitions:

Variable Manufacturing Overhead

Costs that vary with the level of production output and include expenses such as indirect materials, supplies, and utilities used in manufacturing.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on efficient operations.

Variable Overhead

Costs that vary with the level of production or sales, such as utilities or hourly wages, that are not directly tied to a specific product.

Direct Labor-hours

Sum total of hours expended by workers directly active in the manufacturing domain.