The Litton Company Has Established Standards as Follows

question 109

Multiple Choice

The Litton Company has established standards as follows:

Direct material: 3 pounds per unit $4 per pound = $12 per unit
Direct labor: 2 hours per unit $8 per hour = $16 per unit
Variable manufacturing overhead: 2 hours per unit $5 per hour = $10 per unit

Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
-The variable overhead rate variance is:

• A)$240 U
• B)$220 U
• C)$220 F
• D)$240 F

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Definitions:

Subordinates

Individuals who work under the direction and control of a superior in the hierarchy of an organization.

Social Power

Power used to create motivation or to accomplish group goals.

David McClelland

A psychologist known for his work on motivation theory, particularly the theory of Needs (Achievement, Power, and Affiliation).

Group Goals

Objectives set by a collective that guide its actions and efforts towards a common end.