Figure 11-3

question 40

Multiple Choice

Figure 11-3. Montgomery Company has developed the following flexible budget formulas for its four overhead items:
Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours) ; however this year 19,000 units were produced with the following actual costs:
Refer to Figure 11-3.Calculate the variance for maintenance using an after-the-fact flexible budget.

• A)$13,000 U
• B)$13,100 F
• C)$11,000 U
• D)$1,000 F
• E)none of these

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and cost of goods sold using the average cost of all similar items in inventory.

Net Income

The amount of money left after all expenses, taxes, and costs have been subtracted from total revenue; a key indicator of a company's profitability.

Current Prices

Prices of goods, services, or assets at the current time, without adjustment for inflation.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, thus in the process of being transported.