Kevin Jarvis Is the Controller of Bitterroot Industries

question 134

Multiple Choice

Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements, and after discussions with the sales and production managers, the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units. Actual results for the year were 28,000 units, reflected in the following income statement: What is the flexible budget variance for variable overhead?

• A)$5,600 favorable
• B)$5,600 unfavorable
• C)$30,400 favorable
• D)$34,000 unfavorable

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Definitions:

Repeat-purchase Item

A good or service that consumers buy frequently or repeatedly over time, indicating loyalty or sustained need.

Frequent Transaction

Regular or repeated exchanges or dealings, especially in a financial context.

Imperfect Information Problem

The imperfect information problem occurs when one or more parties in a transaction have less information than the other(s), leading to decisions that may not be optimal.

High-quality Products

Goods that meet or exceed customer expectations in terms of durability, reliability, performance, and aesthetics.