The Dodge Company Makes and Sells a Single Product and Uses

question 32

Multiple Choice

The Dodge Company makes and sells a single product and uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. The Dodge Company had the following budgeted and actual data for the year:

The budgeted direct labor-hours is used as the denominator activity for the month.
-The fixed manufacturing overhead volume variance as:

• A)$7,500 F
• B)$1,500 F
• C)$3,750 U
• D)$7,500 U

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Definitions:

Systematic

Methodically organized and carried out according to a plan or structured framework.

Chemicals

Substances with a distinct molecular composition that are used or produced in a chemical process.

Inhelder

Swiss developmental psychologist best known for her work on the cognitive development of children, often in collaboration with Jean Piaget.