Pohl Corporation Uses a Standard Cost System in Which Manufacturing

question 77

Multiple Choice

Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours. For June, the company's manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine-hours:

During June, 17,000 machine-hours were used to complete 13,000 units of product, and the following actual total overhead costs were incurred:

At standard, each unit of finished product requires 1.4 hours of machine time.
-The fixed manufacturing overhead budget variance (in total) for June was:

• A)$3,230 F
• B)$3,230 U
• C)$1,180 F
• D)$1,180 U

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Definitions:

Financial Reporting

The process of disclosing financial performance and position of a company through financial statements issued periodically.

Economic Substance

A principle that transactions should reflect their true economic purpose, not just their legal form.

Faithful Representation

Faithful Representation refers to financial information that accurately reflects an entity's financial performance, position, and changes in financial position.

Plant And Equipment

Long-term tangible assets used in the operations of a business, not intended for resale.