Able Control Company, Which Manufactures Electrical Switches, Uses a Standard

question 49

Multiple Choice

Able Control Company, which manufactures electrical switches, uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours (DLHs) . The standard overhead costs are shown below: *Based on 300,000 DLHs per month.

The following information is available for the month of October:

• Plans called for the production of 60,000 switches.
• 56,000 switches were actually produced.
• 275,000 direct labor-hours were worked at a total cost of $2,550,000.
• Actual variable manufacturing overhead costs were $2,340,000.
• Actual fixed manufacturing overhead costs were $3,750,000.
-The fixed manufacturing overhead budget variance for October was:

• A)$48,000 Unfavorable
• B)$150,000 Unfavorable
• C)$300,000 Favorable
• D)$390,000 Unfavorable

---

Definitions:

Upper and Lower South

Terms used to differentiate between the geographical regions of the American South, with the Upper South referring to states like Virginia and Tennessee, and the Lower South to states such as Georgia and Alabama.

Slave-Owning Class

A social class in historical contexts, particularly in the American South, that owned slaves as property for labor and economic gain.

Paternalist Ethos

A belief system advocating a hierarchical relationship between groups or individuals, whereby those in authority adopt a fatherly role of providing for and directing those under their care.

Hierarchical Society

A social system in which individuals are ranked one above the other according to status, authority, or some other criterion, creating layers of superiority and inferiority.