A Company's Flexible Budget for the Range of 35,000 Units

question 85

Multiple Choice

A company's flexible budget for the range of 35,000 units to 45,000 units of production showed variable overhead costs of $2 per unit and fixed overhead costs of $72,000.The company incurred total overhead costs of $148,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

• A)$6,800 favorable.
• B)$6,800 unfavorable.
• C)$3,200 favorable.
• D)$3,200 unfavorable.
• E)$10,000 favorablE.

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Definitions:

Property Taxes

Taxes levied by local governments on real estate owned by individuals and businesses based on the assessed value of the property.

Annual

Relating to a period of one year.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Depreciation

An approach to distributing the expense of a material asset across its period of utility.