Messenger, Inc

question 33

Multiple Choice

Messenger, Inc. has a standard variable overhead rate of $5 per machine hour, with each completed unit expected to take three machine hours to produce. A review of the company's accounting records found the following:
Actual production: 19,500 units
Variable-overhead efficiency variance: $9,000U
Variable-overhead spending variance: $21,000F
What was Messenger's actual variable overhead during the period?

• A) $262,500.
• B) $280,500.
• C) $304,500.
• D) $322,500.
• E) None of the answers is correct.

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Definitions:

Incremental Sales

The additional sales generated by a particular business activity or decision, beyond what would have been achieved without it.

One-Time Expense

An uncommon or unique expenditure that is not expected to recur in the foreseeable future, often highlighted separately in financial statements.

Straight-Line Depreciation

A process for dividing the expense of a tangible asset uniformly across its expected lifetime in annual segments.

Net Annual Operating

Typically refers to the net operating income or profit generated by a business over the course of a year, excluding non-operating revenues and expenses.