Reference: 11-13 The Upton Company Employs a Standard Costing System in Which

Multiple Choice

Reference: 11-13
The Upton Company employs a standard costing system in which variable overhead is assigned to production on the basis of direct labour hours. Data for the month of February include the following:
Variable manufacturing overhead cost incurred: $48,700
Total variable overhead variance: $300 F
Standard hours allowed for actual production: 7,000
Actual direct labour hours worked: 6,840
-Which of the following could result in a situation where the use of a standard cost system to control labour costs might not be the most useful?

A) Standards are viewed by employees as reasonable.
B) Manufacturing is highly automated.
C) There is a desire to simplify the accounting for costs of items manufactured.
D) The integration of costing with responsibility accounting.