Target Allows Customers to Use MasterCard

question 138

Multiple Choice

Target allows customers to use MasterCard. They report Sales revenue of $24 000 for the week. MasterCard charges Target a 3% fee. The journal entry for this transaction would be:

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Definitions:

Standard Cost

An estimated or pre-determined cost of manufacturing a product, which is used for budgeting and performance evaluation.

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to variations in production volume.

Fixed Overhead Budget Variance

This variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs. It helps identify discrepancies in planned versus actual spending.

Direct Labor-hours

A measure of the labor time directly involved in the production of goods, used as a base for allocating overhead in some costing systems.