Framlingham Uses a Standard Costing System for Product Costing

question 82

Multiple Choice

Framlingham uses a standard costing system for product costing. The company uses direct labour hours as the cost driver to apply overhead costs. The following amounts were budgeted for the year:
The following were the actual results:
Calculate the variable overhead spending variance.

• A) $25 000 favourable
• B) $50 000 favourable
• C) $25 000 unfavourable
• D) $10 000 unfavourable

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Definitions:

Independent Variable

Factors in an experiment that are deliberately changed to test their impact on outcomes, observed through changes in the dependent variable.

Mean Square Error

A metric used to measure the average of the squares of the errors, indicating the discrepancy between estimated and actual values.

Dependent Variable

In a study or experiment, this is the variable anticipated to vary as a result of alterations in the independent variable.

Independent Variable

A variable in an experiment that is manipulated or changed by the researcher to observe its effect on the dependent variable.