Fixed Overhead Was Budgeted at $200,000, and 25,000 Direct Labor

question 124

Multiple Choice

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted.If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

• A) $208,000.
• B) $206,000.
• C) $202,000.
• D) $194,000.

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Definitions:

Implicit Marginal Tax Rates

The effective rate at which additional income is taxed, considering both explicit taxes and the phase-out of benefits or allowances.

Incentive to Earn

Motivations or rewards that encourage individuals or entities to increase their income through work or investment.

Transfer Payments

Payments made by governments to individuals without the expectation of a direct service or goods in return, such as welfare checks.

Means-tested Income Transfers

Financial transfers or benefits given to individuals or families whose income falls below a certain level, aimed at reducing poverty and income inequality.