Use the Following Information for the Next 3 Questions

question 94

Multiple Choice

Use the following information for the next 3 questions.
Anacortes, Inc. uses a standard cost system. At the beginning of the year, it budgeted $50,000 for fixed overhead. The estimated variable overhead allocation rate was $3.30 per machine hour, and machine hours is the cost allocation base for both variable and fixed overhead. The static budget was based on 16,000 units of production and sales, and each unit was expected to use 2.5 machine hours. Actual total overhead was $170,000, and Anacortes produced and sold 15,000 units during the year. Actual machine hours for the year were 36,000.
-(Appendix 11A) The revenue sales quantity variance will be unfavorable when the

• A) Actual sales in total units is less than total unit sales in the static budget
• B) Actual contribution margin is less than the static budget contribution margin
• C) Actual sales mix includes a lower proportion of the product with the highest contribution margin per unit than its proportion in the static budget sales mix
• D) Actual average selling price is less than the average selling price in the static budget

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, and should not affect future decision-making processes.

Discrimination Learning

A cognitive process where an organism learns to respond differently to various stimuli because they are associated with different outcomes.

Negative Reinforcement

A conditioning process where a negative (aversive) stimulus is removed after a particular behavior is exhibited, increasing the likelihood of that behavior occurring again.

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit a similar response.