Garner Company Planned to Produce 12,000 Units

question 163

Multiple Choice

Garner Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. _ is the flexible budget amount for processing.

• A) $222,000
• B) $188,000
• C) $225,000
• D) $213,500

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Definitions:

Keynes

Refers to John Maynard Keynes, a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies of governments.

Transactions Reasons

The underlying motives or justifications for conducting financial transactions or business operations.

Opportunity Costs

The price paid for not selecting the immediate alternative choice during decision-making.

Collection Float

The time period between when a check is deposited into a bank account and when the funds are available for use, affecting the cash flow of a business.