Figure 16-1
Armati, SA The Following Actually Occurred -Refer to Figure 16-1

question 2

Multiple Choice

Figure 16-1
Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below:
Armati, SA., had the following budgeted data: $\begin{array}{lr}\text { Unit sales for } 2011 & 26,000 \\\text { Unit production for } 2011 & 26,000\\\\\text { Budgeted fixed overhead for } 2011 \text { : }\\\text { Supervision } & £ 800 \\\text { Depreciation } & 2,000 \\ \text { Rent } & 100\\\\\text { Budgeted variable costs per unit: }\\\text { Direct materials } & £ 0.15 \\\text { Direct labour } & 0.20 \\\text { Supplies } & 0.02 \\\text { Indirect labour } & 0.05 \\\text { Power } & 0.02\end{array}$ The following actually occurred: $\begin{array}{ll}\text { Actual unit sales for } 2011 & 24,000 \\\text { Actual unit production for } 2011 & 28,000\\\\\text { Actual fixed overhead for } 2011 \text { : }\\\text { Supervision } & £ 850 \\\text { Depreciation } & 2,000 \\\text { Rent } & 100\\\\\text { Actual variable costs: }\\\text { Direct materials } & £ 3,500 \\\text { Direct labour } & 4,900 \\\text { Supplies } & 530 \\\text { Indirect labour } & 1,250 \\\text { Power } & 470\end{array}$
-Refer to Figure 16-1. The static budget variance for supplies is

• A)£10 U.
• B)£10 F.
• C)£50 U.
• D)£50 F.

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Definitions:

Principal Place of Business

The primary location where a corporation's executives direct, control, and coordinate the business activities.

Incorporated

The process by which a business is legally declared a corporate entity, separate and distinct from its owners, with its own rights and liabilities.

In Personam Jurisdiction

The legal authority of a court to require a person to appear before it and to subject that person to its decisions.

In Rem Jurisdiction

A legal principle concerning the power a court has over an object or status rather than over a person, often used in property disputes.