When Walston Corporation Prepared Its Budget for 2017, It Estimated

question 75

Multiple Choice

When Walston Corporation prepared its budget for 2017, it estimated fixed overhead of $540,000 ($45,000 per month) and variable overhead at $3.00 per unit produced.The company planned to produce 48,000 units during the year at a rate of 4,000 units each month.During April, the company produced 3,800 units and total overhead costs were $59,000.How much is the controllable overhead variance for April?

• A)$2,000 unfavorable
• B)$2,600 unfavorable
• C)$600 favorable
• D)$2,250 unfavorable

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Definitions:

Issuing Common Stock

The process by which a company sells new shares of its common stock to investors, thereby raising equity capital.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholder equity, indicating how effectively a company uses investments to generate earnings.

Average Total Stockholders' Equity

Average total stockholders' equity calculates the mean equity held by shareholders over a given period, indicating the ownership value in a company.

Net Income

Net Income is the total earnings computed as revenues minus expenses, taxes, and the cost of goods sold, indicating a company's profitability over a specified period.