On the Basis of the Following Data, What Is the Estimated

question 9

Multiple Choice

On the basis of the following data, what is the estimated cost of the inventory on May 31 using the retail method?

• A)$250,000
• B)$360,000
• C)$172,500
• D)$187,500

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Definitions:

Budget Variance

The difference between what was budgeted or forecasted and what was actually achieved, indicating over or underperformance.

Predetermined Overhead Rate

A calculated rate used to apply manufacturing overhead to products or job orders, based on a related activity measure such as labor hours.

Variable Manufacturing Overhead

The costs that vary with production volume, such as indirect materials, utilities, and labor involved in the manufacturing process.

Machine-Hour

A measure of production output or activity based on the number of hours a machine is operated.