The Maxwell Corporation Has a Standard Costing System in Which

question 184

Multiple Choice

The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:

• Actual variable manufacturing overhead cost incurred: $22,620
• Actual machine-hours worked: 1,600 hours
• Variable overhead rate variance: $3,420 Unfavorable
• Total variable overhead spending variance: $4,620 Unfavorable

-The variable overhead efficiency variance for July is:

• A)$8,040 Unfavorable
• B)$8,040 Favorable
• C)$1,200 Unfavorable
• D)$1,200 Favorable

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Definitions:

Normal Approximation

A mathematical method used to approximate the binomial distribution with the normal distribution when the sample size is large and the probability of success is not too close to 0 or 1.

Binomial Distribution

A probability distribution describing the number of successes in a fixed number of binary, independent trials given a specific success probability.

Random Sample

A group selected from a broader population where every individual has the same likelihood of being chosen.

Uniformly Distributed

A type of distribution where all outcomes are equally likely; every variable has the same frequency or probability.