Jackson,Inc Manufactures Two Products That It Sells to the Same

question 61

Multiple Choice

Jackson,Inc manufactures two products that it sells to the same market.Excerpted below are its budgeted and actual operating results for the year just completed:
Industry volume was estimated to be 1,875,000 units at the time the budget was prepared.Actual industry volume for the period was 2,440,000 units.Jackson measures variances using contribution margin.If fixed costs are budgeted for $500,000 and are actually $500,000,what is the difference between budgeted and actual operating income?

• A)$3,200 favorable.
• B)$5,800 favorable.
• C)$122,500 unfavorable.
• D)$65,550 favorable.
• E)$23,455 favorable.

---

Definitions:

Work In Process Inventory

Goods partially completed in the manufacturing process, not yet ready for sale.

Units Transferred Out

The complete quantity of units that have moved through a production process and are sent out from a specific department or the entire production system.

Processing Department

A section within a manufacturing facility where specific types of operations or treatments are carried out on products.

First-In, First-Out Method

An inventory valuation method where the first items purchased or produced are the first ones sold, affecting the cost of goods sold and ending inventory value.