Mcdougald Corporation Is a Service Company That Measures Its Output

question 348

Multiple Choice

Mcdougald Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. When the company prepared its planning budget at the beginning of March, it assumed that 21 customers would have been served. However, 26 customers were actually served during March.The spending variance for "Employee salaries and wages" for March would have been closest to:

• A) $1,200 F
• B) $3,800 F
• C) $3,800 U
• D) $1,200 U

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Definitions:

Synthesize Bile

The process of producing bile, a digestive fluid created in the liver and vital for the digestion and absorption of lipids in the small intestine.

Hydrochloric Acid

A strong, corrosive acid that is a major component of gastric acid, aiding in digestion and absorption in the stomach.

Microvilli

Small, fingerlike extensions of the plasma membrane of cells, increasing surface area for absorption.

Plicae Circularis

Internal folds of the intestinal lining that increase surface area for absorption of nutrients.