Figure 11-5

question 47

Multiple Choice

Figure 11-5. Merric Company uses an activity-based costing system.Four activities have been identified.The setup activity uses the number of setups as its cost driver.The following budget information is available for this activity:
The company expects to perform 25 setups in May.
Refer to Figure 11-5.Actual costs incurred were $246,000 fixed and $144,000 variable.If the actual number of setups in May was 30,what is the activity-based flexible budget variance?

• A)$15,000 U
• B)$15,000 F
• C)$12,000 F
• D)$12,000 U

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Definitions:

Cartel

A formal agreement among firms (or countries) in an industry to set the price of a product and establish the outputs of the individual firms (or countries) or to divide the market for the product geographically.

Monopoly Price

The price set by a monopolist, which is typically higher than in competitive markets, reflecting the monopolist's market power and lack of competition.

Patents and Copyrights

Legal tools that give creators and inventors exclusive rights to their creations and inventions for a certain period, encouraging innovation.

Collude

When two or more firms agree to work together, usually secretly, to limit competition and increase prices.