Felter Company Uses a Standard Costing System Based on Direct

question 29

Multiple Choice

Felter Company uses a standard costing system based on direct labour hours. Last month, Felter Company used more electricity and indirect materials than planned. This is likely to result in

• A) unfavourable variable overhead efficiency variance.
• B) unfavourable variable overhead efficiency variance and unfavourable variable overhead spending variance.
• C) unfavourable variable overhead efficiency variance and unfavourable fixed overhead variance.
• D) unfavourable variable overhead spending variance.

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Definitions:

Population Mean

The average of all the values in a population.

Sampling Distribution

The distribution of a statistic (such as the mean) computed from a sample, over repeated sampling from the same population.

Variability

The extent to which data points differ from each other and from the mean of the data set.

Sampling Distribution

The distribution that indicates the probabilities of a given statistic, which is acquired from a random sample.