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A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output 4.20 direct labor-hours $11.55 per direct labor-hour Standard variable overhead rate The following data pertain to operations for the last month: Actual direct labor-hours Actual total variable manufacturing overhead cost Actual output 8,600 direct labor-hours $ 95,890 1,900 units What is the variable overhead rate variance for the month? Actual direct labor-hours Actual total variable manufacturing overhead cost Actual output What is the variable overhead rate variance for the month? Multiple Choice $3,440 Favorable $3,721 Favorable $3,440 Unfavorable $3,721 Unfavorable The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 926,000 $ 407,000 $ 340,000 $ 247,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $209,000 of the fixed manufacturing expenses and $120,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product 074F? Multiple Choice $190,000 $68,000 ($190,000) ($68,000) 24
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