Dori Castings Is a Job Order Shop That Uses a Standard

question 102

Multiple Choice

Dori Castings is a job order shop that uses a standard cost system. Manufacturing overhead costs are applied on the basis of standard direct labor-hours. A volume variance will exist for Dori in a month where:

• A)production volume differs from sales volume.
• B)actual direct labor-hours differ from standard hours allowed.
• C)there is a budget variance in fixed manufacturing overhead costs.
• D)the fixed manufacturing overhead applied to units of product on the basis of standard hours allowed differs from the budgeted fixed manufacturing overhead.

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Definitions:

Accounting Entities

Organizations or business units considered separate from their owners for accounting purposes.

Prospective

Relating to or effective in the future, often used in planning and forecasting scenarios.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Depreciation Expense

The portion of the cost of a fixed asset that is considered consumed in each period of the asset's useful life.