Shane Industries Prepared a Fixed Budget of 60000 Direct Labor

question 157

Multiple Choice

Shane Industries prepared a fixed budget of 60000 direct labor hours with estimated overhead costs of $300000 for variable overhead and $90000 for fixed overhead. Shane then prepared a flexible budget at 57000 labor hours. How much is total overhead costs at this level of activity?

• A) $285000
• B) $375000
• C) $370500
• D) $390000

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Definitions:

Available-For-Sale

A classification of securities that are not classified as held-to-maturity or trading securities, marked to market periodically, with changes in value reported in other comprehensive income.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, often referred to as "shareholders' equity" or "owners' equity."

Unrealized Holding

A gain or loss on investments that has occurred but has not yet been sold or cashed in, hence not yet realized as an income or loss.

Trading To Available-For-Sale

The process of reclassifying a security from being actively traded to being held with the intention not to sell in the near term.