-Mcdougald Corporation Is a Service Company That Measures Its Output

question 81

Multiple Choice

-Mcdougald Corporation is a service company that measures its output by the number of customers served.The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. When the company prepared its planning budget at the beginning of March,it assumed that 21 customers would have been served.However,26 customers were actually served during March.
The spending variance for "Employee salaries and wages" for March would have been closest to:

• A) $1,200 F
• B) $3,800 F
• C) $3,800 U
• D) $1,200 U

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Definitions:

Unrealised Profits

Earnings generated on paper from investments or sales yet to be finalized through actual transaction or cash exchange.

Joint Venture Investment Account

An account that records the initial and ongoing financial contributions made by the partners of a joint venture, adjusted for their share of profits, losses, and distributions.

Transfer of Assets

The act of moving resources or property from one entity to another, which may involve financial, physical, or intangible assets.

Deferred Exploration Expenditure

Costs incurred in exploratory activities in mining and oil and gas companies that are capitalized as an asset on the balance sheet until the resources are found to be economically viable.