Scooby Company Planned to Produce 12,000 Units

question 164

Multiple Choice

Scooby 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 activity- level variance for processing.

• A) $39,000 unfavorable
• B) $42,000 favorable
• C) $42,000 unfavorable
• D) $39,000 favorable

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Definitions:

Capital-Using Technologies

Innovations that increase the efficiency of capital usage, often leading to higher productivity but possibly requiring more initial investment.

Capital-Saving Technologies

Innovations that allow for the same level of production using fewer inputs of capital, usually leading to cost savings and increased efficiency.

Demographic Transition

describes the transformation of a country’s population structure as it progresses from high birth and death rates to low birth and death rates, often as part of economic development.