Bluecap Co

question 13

Multiple Choice

Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010:
During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The total budget for fixed factory overhead in 2010 was:

• A)$230,400.
• B)$259,200.
• C)$265,200.
• D)$276,480.
• E)$288,000.

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Definitions:

Tacit Collusion

An unwritten, unspoken understanding among competitors to set prices or production levels to avoid direct competition.

Formal Agreement

A legally binding contract or arrangement between two or more parties, often documented and enforceable by law.

Duopolists

Firms or entities within an oligopoly that specifically consist of only two producers or sellers in the market.

Collusion

A secret agreement or cooperation between parties, often competitors, to deceive or defraud others, typically in the context of fixing prices or manipulating market outcomes.