Stegemann Corporation Is a Shipping Container Refurbishment Company That Measures

question 36

Multiple Choice

Stegemann Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for May. When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May.
The activity variance for total expenses for May would have been closest to:

• A) $3,600 F
• B) $3,600 U
• C) $4,900 U
• D) $4,900 F

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Definitions:

Profit Goal

A specific, quantifiable financial objective set by a business, aiming to achieve a particular level of profit within a defined period.

Pricing Objectives

Goals that a company wants to achieve through the pricing of its products, such as maximizing profit, increasing market share, or deterring competition.

Market Share

The portion of a market controlled by a particular company, measured by sales volume or revenue.

Sales Revenues

The income that a company receives from its normal business activities, usually from the sale of goods and services to customers.