Use the Following Information to Answer Questions
EKPN Company

question 99

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: $\begin{array}{lr}\text { Direct Materials } & \$ 450,000 \\\text { Direct Labour } & 225,000 \\\text { Variable Overhead } & 1,125,000 \\\text { Fixed Overhead } & 2,100,000\\\\\text { Actual Results: } \\\text { Machine Hours } & \\\text { Direct Materials } & \$ 60,000 \text { hours } \\\text { Direct Labour } & \$ 475,000 \\\text { Variable Overhead } & 245,000 \\\text { Fixed Overhead } & 1,150,000 \\& 2,110,000\end{array}$
-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:

Financing Activities

Transactions related to raising capital and repaying investors, including issuing debt, obtaining loans, and dividend payments.

Operating Activities

Activities that relate to the primary operations of a company, like sales, services, and product creation.

Investing Activities

Financial transactions related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Statement of Cash Flows

A financial document that summarizes the amount of cash and cash equivalents entering and leaving a company, essentially showing how the company raises and spends money.