Formidable Company Collected the Following Information Using the Three Variance Method, What Is the Budget Variance

question 6

Multiple Choice

Formidable Company collected the following information: $\begin{array}{ll}\text { Standard costs per unit: }\\\text { Variable overhead } & 4 \text { machine hours } @ \$ 6 \text { per machine hour } \\\text { Fixed overhead } & 4 \text { machine hours } @ \$ 10 \text { per machine hour }\\\\\text { Actual output } & 20,000 \text { units } \\\text { Denominator (normal capacity) output } & 21,000 \text { units } \\\text { Actual machine hours } & 79,000 \text { machine hours } \\\text { Actual variable overhead cost } & \$ 540,000 \\\text { Actual fixed overhead cost } & \$ 800,000\\\end{array}$ Using the three variance method, what is the budget variance?

• A)$24,000 (U)
• B)$24,000 (F)
• C)$6,000 (U)
• D)$6,000 (F)

---

Definitions:

Human Rights Act

Legislation that protects individuals against discrimination and ensures equality before the law in various aspects of public life.

Employment Equity Act

Legislation aimed at eliminating discrimination and promoting equality in the workplace by ensuring all individuals have equal opportunities for employment and advancement without bias.

Diversity Effort

Initiatives or programs aimed at creating a more diverse and inclusive environment by recognizing and embracing individuals' differences.

Compensation Structure

The system and norms set by an organization for managing and distributing salaries, wages, and benefits among its employees.