Jardell Corporation Makes a Product with the Following Standards for Labor

question 99

Multiple Choice

Jardell Corporation makes a product with the following standards for labor and variable overhead: The company budgeted for production of 6,400 units in June, but actual production was 6,400 units. The company used 3,180 direct labor-hours to produce this output. The actual variable overhead rate was $4.90 per hour. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for June is:

• A)$318 U
• B)$320 F
• C)$318 F
• D)$320 U

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Definitions:

Sunk Cost

A cost that has already been incurred and that cannot be changed by any decision made now or in the future.

Consistency

Refers to the accounting principle that mandates the same accounting methods and procedures to be followed from one financial period to another to ensure comparability of financial statements over time.

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, often used in decision-making to determine if information should be considered.

Decisions

Choices made by individuals or organizations concerning options that affect processes, strategies, or outcomes.