A Manager Uses the Following Equation to Predict Monthly Receipts

question 140

Multiple Choice

A manager uses the following equation to predict monthly receipts: Y _t = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

• A)40,450
• B)40,600
• C)42,100
• D)42,250
• E)42,400

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) costs based on the predetermined overhead rate.

Month

A unit of time, roughly based on the period of the lunar cycle, used in calendars to divide the year.

Fixed Manufacturing Overhead

The consistent, unchanged costs associated with manufacturing a product or service regardless of the output level.

Work in Process

Refers to materials that are in the process of being transformed into finished goods in a manufacturing environment.