(Appendix 10A) Arca Incorporated Makes a Single Product--A Critical Part

question 84

Multiple Choice

(Appendix 10A) Arca Incorporated makes a single product--a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

-The fixed overhead volume variance is:

• A) $42,675 U
• B) $57,675 U
• C) $42,675 F
• D) $57,675 F

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Definitions:

Income Statements

Financial statements that summarize a company's revenue, expenses, and profits over a specific period of time.

Standard Cost

A predetermined cost of manufacturing, delivering, or producing goods or services under normal conditions.

Variance Accounts

Financial accounts used to record the differences between planned and actual figures in budgeting and accounting.

Favorable Variances

Differences between planned and actual performance that result in a better-than-expected financial outcome.