Rainbolt Incorporated Makes a Single Product-An Electrical Motor Used in Many

question 37

Multiple Choice

Rainbolt Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The fixed overhead budget variance is:

• A) $20,000 U
• B) $400 U
• C) $20,000 F
• D) $400 F

---

Definitions:

Clean Air

Air that is free of pollutants and contaminants, considered essential for health and environmental quality.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be consumed by many people without diminishing its availability to others.

National Defense

The protection and defense of a country against foreign threats and aggression, typically through military means.

Marginal Cost

The cost of producing one additional unit of a good.