Bluecap Co

question 158

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 overhead variance in 2010 is:

• A)$14,000 unfavorable.
• B)$15,040 favorable.
• C)$17,280 favorable.
• D)$37,840 favorable.
• E)$37,840 unfavorable.

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Definitions:

Innovation

The process of introducing new ideas, products, or methods to improve efficiency, effectiveness, or competitive advantage.

Economic Value

The worth of a good or service determined by the market, reflecting its ability to satisfy human needs or wants.

Contingency Approaches

Management theories suggesting that the best leadership or organizational practices depend on the specifics of the situation.

Contingency Model

A leadership theory that suggests the effectiveness of a leadership style is contingent upon the situation, including the leader's capability and the task characteristics.