DBC Company Applies Fixed Overhead at $8 Per Machine Hour

question 13

Essay

DBC Company applies fixed overhead at $8 per machine hour.During the year actual fixed overhead amounted to $75 000 and the standard machine hours allowed for units produced was 11 000.Budgeted fixed overhead was $80 000.Which of the following is the best description of the items used to calculate the volume variance?
A.
$80 000
$88 000
ignore
B.
$88 000
$88 000
ignore
C.
$88 000
$75 000
ignore
D.
ignore
$88 000
$75 000

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Definitions:

Status Quo

The existing state or condition of affairs, often implying a resistance to change or innovation.

Promote Stability

The process or actions taken to maintain a steady and unchanging condition in an organization or system.

Smooth Running

The efficient and effective operation of a process, organization, or system, with minimal disturbances or conflicts.

Preconceived Notions

Ideas or opinions formed before having the evidence for their truth or usefulness, often based on stereotypes or initial impressions.