Hyland Resources Inc

question 39

Multiple Choice

Hyland Resources Inc. uses practical capacity as the denominator to set the cost of supplying capacity and for the current period the budgeted cost per unit of supplying capacity was $44. Practical capacity was set at 14,000 units with theoretical capacity at 20,000 units. During the period, only 11,000 units were produced while the master budget assumed that the company would produce 13,000 units. What is value of the manufacturing resources not used during the period?

• A) $132,000
• B) $308,000
• C) $396,000
• D) $44,000

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Definitions:

Owner's Equity

The residual interest in the assets of an enterprise after deducting its liabilities, often referred to as net assets.

Long-Term Assets

Assets that are expected to provide economic value to a business for more than one year, such as property, plant, and equipment.

Economic Climate

The overall state of the economic environment, characterized by factors such as growth rates, unemployment, inflation, and consumer confidence.

Conditions

Conditions include the specific requirements, terms, or situations that affect or determine the operation of agreements, policies, or actions.