Figure 16-3
Harald, SA Following Are the Actual Costs of Producing 85,000 Stickers: 5,000

question 21

Multiple Choice

Figure 16-3
Harald, SA., has done a cost analysis for its production of bumper stickers. The following activities and cost drivers have been developed: $\begin{array}{ll}\text { Activity } & \text { Cost Formula } \\\text { Maintenance } & £ 11,000+£ 0.11 \text { per machine hour } \\\text { Machining } & £ 25,000+£ 0.50 \text { per machine hour } \\\text { Setups } & £ 50 \text { per batch } \\\text { Purchasing } & £ 200+£ 45 \text { per purchase order }\end{array}$ Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders $\begin{array}{lr}\text { Maintenance } & £ 11,500 \\\text { Machining } & 28,300 \\\text { Setups } & 550 \\\text { Purchasing } & 1,000\end{array}$
-Refer to Figure 16-3. What is the budget variance for total costs in an activity-based performance report?

• A)£700 U
• B)£700 F
• C)£800 U
• D)none of the above

Recognize the consequences of an agent's actions on the principal's liability, including in tort and contract scenarios.

Understand the principle of respondeat superior and its application.

Learn the rules governing the termination of an agency relationship.

Identify the responsibilities and liabilities associated with hiring practices and the torts committed by employees.

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Definitions:

Method

A systematic way of doing things or a procedure. This definition is broadly applicable across different contexts including sciences, arts, and business operations.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Production Levels

Production levels pertain to the quantity of goods or services produced over a specified period, directly influencing a company's inventory and supply chain.

Product Costs

Costs that are directly associated with the production of goods, including direct labor, direct materials, and manufacturing overhead.