Use the Following Information for the Next 3 Questions

question 11

Multiple Choice

Use the following information for the next 3 questions.
General Mtg. Co. budgeted fixed overhead costs of $25,000 per quarter and 1,000 units per quarter in its normal absorption costing system. Any volume variance is carried forward and closed at year end. The company experienced the following activity:
-The volume variance for the year was

• A) -0-
• B) Favorable
• C) Unfavorable
• D) Cannot be determined

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Definitions:

Pooling of Interest Method

An accounting method used in mergers and acquisitions, where the combined assets and liabilities of the merging entities are recorded at their historical costs.

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Business Combinations

Transactions in which one entity gains control over another and they are combined into one entity, often involving mergers, acquisitions, or consolidations.

Voting Common Stock

Shares in a company that grant the holder the right to vote on corporate matters, such as electing the board of directors.