Azzurra Corporation Manufactures Computer Chips Used in Aircraft and Automobiles

question 30

Multiple Choice

Azzurra Corporation manufactures computer chips used in aircraft and automobiles.Manufacturing overhead at Azzurra is applied to production on the basis of standard machine-hours.Which overhead variance(s) at Azzurra would be affected in an unfavorable manner if fire and theft insurance rates increase by 25% unexpectedly during the period?

• A) variable overhead rate variance
• B) variable overhead efficiency variance
• C) fixed manufacturing overhead budget variance
• D) fixed manufacturing overhead volume variance

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Definitions:

Flexible Spending Account

A special account you put money into that you use to pay for certain out-of-pocket health care costs, using pre-tax dollars, thus reducing taxable income.

Medical Insurance

A type of insurance coverage that pays for an insured individual's healthcare expenses.

Taxable Income

The amount of income used to determine how much the taxpayer owes in taxes, after deductions and exemptions.

Tax Freedom Day

The day of the year by which a nation as a whole has theoretically earned enough income to pay its taxes for the year.