Milot Corporation Is an Oil Well Service Company That Measures

question 264

Multiple Choice

Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April.
The activity variance for total expenses for April would have been closest to:

• A) $4,200 F
• B) $1,000 F
• C) $1,000 U
• D) $4,200 U

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Definitions:

Hypothetical Situations

Scenarios or conditions that are imagined for the purpose of discussion, analysis, or experimentation, often used in problem-solving and decision-making processes.

Formal Operational

The stage of cognitive development, according to Jean Piaget, in which individuals develop the ability to think abstractly, logically, and systematically.

Preconventional

The first level in Kohlberg's stages of moral development, where morality is externally controlled and children act under external standards.

Kohlberg

He is known for his theory of moral development which suggests that the ability to reason morally depends upon certain developmental stages.