Duo, Inc, Carries Two Products and Has the Following Year-End Income

question 64

Multiple Choice

Duo, Inc., carries two products and has the following year-end income statement (000s omitted) :The net effect of ZR-7's selling price variance on profit is:

• A) $240 favorable.
• B) $400 unfavorable.
• C) $420 unfavorable.
• D) $560 favorable.
• E) $800 unfavorable.

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Definitions:

Equipment

denotes tangible assets used in operations, such as machinery or office equipment, which have a useful life beyond one accounting period.

Liability

A company's financial debt or obligations that arise during the course of its business operations.

Expense

An expense constitutes the money spent or cost incurred in an organization's efforts to generate revenue, representing the consumption of assets.

Liability Account

A financial accounting ledger that represents debts or obligations a company owes to others.