Franklin Glass Works Uses a Standard Cost System in Which

question 104

Multiple Choice

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor 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 manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:
-Franklin's variable overhead efficiency variance for the year is:

• A)$33,000 unfavorable
• B)$35,200 favorable
• C)$35,200 unfavorable
• D)$33,000 favorable

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Definitions:

Real Wages

The purchasing power of an individual's earnings, accounting for inflation.

Cost-Of-Living Increases

Adjustments to salaries or wages to offset the impact of inflation on purchasing power.

Job Evaluation

A systematic process used to assess the relative worth of jobs within an organization for the purpose of establishing fair compensation levels.

Private Sector

Part of the economy that is run by individuals and companies for profit and is not directly controlled by the state.