Figure 11-3

question 138

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.Using an after-the-fact flexible budget,calculate the total budget variance.

• A)$12,510 U
• B)$3,600 U
• C)$5,000 F
• D)$12,510 F
• E)none of these.

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Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that consumers are willing to buy.

Marginal Cost

The increment in cost due to the manufacture of an additional product or service unit.

Price Elasticity

A concept related to elasticity of demand, specifically measuring how much the quantity demanded of a good responds to changes in its price.

Marginal Cost

The expenditure associated with creating a subsequent unit of a product or service.