Biery Corporation Makes a Product with the Following Standard Costs

question 129

Multiple Choice

Biery Corporation makes a product with the following standard costs:

The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor-hours. During the month, the company purchased 6,000 liters of the direct material at $5.80 per liter. The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

-The variable overhead rate variance for April is:

• A)$261 U
• B)$246 F
• C)$261 F
• D)$246 U

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Definitions:

Goodwill

An intangible asset arising when a company acquires another for a price higher than the fair market value of its net assets.

Other Comprehensive Income

Income that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Equity Method

A financial recording method where investments are logged if the investor has a considerable impact on the investee, though not complete control.

Cumulative Losses

Total losses accumulated over a period, often reflecting a company's financial difficulties or losses in investment value.