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:

Accounting Treatments

Methods or procedures applied in preparing and presenting financial statements, based on guidelines from accounting standards.

Credit Risk

The potential for loss due to a borrower's failure to make payments on any type of debt.

Principal

The original amount of a debt or investment before interest.

Interest Payments

Periodic payments made to lenders or creditors as compensation for borrowing money, usually calculated as a percentage of the principal amount.