Clement Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor
Clement uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:
Direct materials: 4 pounds per unit; $4 per pound
Direct labor: 4 hours per unit; $17 per hour
Clement produced 5,000 units during the quarter. At the end of the quarter, an examination of the labor costs records showed that the company used 23,000 direct labor hours and actual total direct labor costs were $390,000. The direct labor efficiency variance was $51,000 U. Which of the following is a logical explanation for this variance?
A) The company used more labor hours than allowed by the standards.
B) The company paid a higher cost per hour for labor than allowed by the standards.
C) The company used a higher quantity of direct materials than allowed by the standards.
D) The company paid a higher cost for the direct materials than allowed by the standards.
A
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Zero Company's standard factory overhead application rate is $3.77 per direct labor hour (DLH), calculated at 90% capacity = 1,000 standard DLHs. In December, the company operated at 80% of capacity, or 889 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,100, of which $1,420 is fixed overhead. For December, the actual factory overhead cost incurred was $3,760 for 930 actual DLHs, of which $1,370 was for fixed factory overhead.
If Zero Company uses a two-way breakdown (decomposition) of the total overhead variance, what is the total factory overhead flexible-budget variance for December (to the nearest whole dollar)? (Do not round intermediate calculations.)
Which of the following is usually used as a basis used for making media mix decisions?
a. audience income b. cost per thousand c. clutter d. media schedule