Mazzo Corporation Makes a Product with the Following Standards for Direct

question 86

Multiple Choice

Mazzo Corporation makes a product with the following standards for direct labor and variable overhead: In February the company's budgeted production was 5,000 units, but the actual production was 5,100 units. The company used 2,090 direct labor-hours to produce this output. The actual variable overhead cost was $6,688. The company applies variable overhead on the basis of direct labor-hours.
-The variable overhead rate variance for February is:

• A)$408 U
• B)$418 F
• C)$418 U
• D)$408 F

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Definitions:

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Uncollectible

Refers to accounts receivable that are considered to be uncollectable and are thus written off as a bad debt expense.

Cash Receipts

The collection of money (currency, checks, wire transfers) by a business from its customers or other parties.

Inventory Purchases

The total cost associated with buying goods and materials kept in stock for the purpose of resale or production in a given period.