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

question 12

Multiple Choice

Duo, Inc., carries two products and has the following year-end income statement (000s omitted) :The net effect of AR-10's sales volume variance on profit is:

• A) $720 favorable.
• B) $817 favorable.
• C) $1,060 favorable.
• D) $1,160 favorable.
• E) $1,440 favorable.

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Definitions:

January

In the Gregorian calendar, the year begins with January, recognized as the first month.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead expected for the actual production level.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost of the variable overhead allotted for the actual production level.

Supplies

Materials and items that are used in the day-to-day operations of a business but are not directly tied to the production of goods or services.