Use the Following Information to Answer Questions
EKPN Company

question 71

Multiple Choice

Use the following information to answer questions
EKPN Company prepared the following data in its static budget based on 150,000 machine hours:
$$\begin{array} { l l } \text { Direct Materials } & \$ 4 5 0 , 0 0 0 \\\text { Direct Labour } & 2 2 5 , 0 0 0 \\\text { Variable Overhead } & 1,125,000 \\\text { Fixed Overhead } & \mathbf { 2 } , 100,000\end{array}$$ $$\begin{array} { l l } \text { Actual Results: } & \\\text { Machine Hours } & 160,000 \text { hours } \\\text { Direct Materials } & \$ 475,000 \\\text { Direct Labaur } & 2 4 5 , 000 \\\text { Variable Overhead } & 1,150,000 \\\text { Fixed Overhead } & \mathbf { 2 } , 110,000\end{array}$$
-What was the difference between the actual and budgeted direct material costs at the actual level of activity?

• A)$25,000 unfavourable
• B)$25,000 favourable
• C)$5,000 unfavourable
• D)$5,000 favourable

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Definitions:

Thalamus

A brain structure that acts as a relay station, processing and transmitting sensory information to the appropriate areas of the brain for further processing.

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The outer layer of the cerebrum in the brain, associated with higher brain functions such as thought and action.

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A sense that detects odors or scents through the olfactory system, typically perceived through the nose.

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Individuals with a heightened sensitivity to tastes, especially bitter flavors, due to a higher number of taste papillae on their tongue.