QUESTION 3

1. A companys manufacturing plans were as follows:

   Units to be manufactured: 8,000 units

   Budgeted variable costs: $24,000

   Budgeted fixed costs: $50,000

   Budgeted total cost: $74,000

   Later, the company actually produced 7,500 units, and incurred a total cost of $73,000 (variable costs of $24,000 and fixed costs of $49,000). The overall variance was:

   	A.	$3,625, Unfavorable
   	B.	$1,000, Favorable
   	C.	$500, Unfavorable
   	D.	$1,500, Unfavorable

1 points

QUESTION 4

1. Assume that variable overhead is applied based on direct labor hours. If direct labor efficiency variance is favorable by the amount of $10,000, which of the following is true?

   	A.	The variable overhead spending (price) variance is favorable.
   	B.	The variable overhead efficiency variance is favorable by the amount of $10,000.
   	C.	The variable overhead resources were used less than expected.
   	D.	The variable overhead efficiency variance is favorable.