Formidable Company Collected the Following Information: Standard Costs Per Unit

question 19

Multiple Choice

Formidable Company collected the following information: Standard costs per unit:
Variable overhead 4 machine hours @ $6 per machine hour
Fixed overhead 4 machine hours @ $10 per machine hour
Actual output 20,000 units
Denominator (normal capacity) output 21,000 units
Actual machine hours 79,000 machine hours
Actual variable overhead cost $540,000
Actual fixed overhead cost $810,000
Using the two variance method, what is the volume variance?

• A) $6,000 (F)
• B) $40,000 (F)
• C) $40,000 (U)
• D) $6,000 (U)

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Definitions:

Lead Times

The duration between the initiation and the completion of a production process, or the time it takes for an order to be delivered after its placement.

Macro Processes

Refers to the overarching, large-scale operations or functions within a system or organization that influence its overall performance.

Supply Chain

A supply chain encompasses the sequence of processes involved in the production and distribution of a commodity, from the procurement of raw materials to the delivery of the finished product to the end consumer.

Supply Chain Flows

The movement of goods, information, and finances as they pass through a set of entities from supplier to manufacturer to wholesaler to retailer to consumer.