Wyzard Corporation Is a Shipping Container Refurbishment Company That Measures

question 163

Multiple Choice

Wyzard Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished.The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for February. When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished.However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to:

• A)$1,800 F
• B)$17,200 F
• C)$1,800 U
• D)$17,200 U

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Definitions:

Quality Cost Report

A detailed breakdown of all costs related to ensuring the quality of products, including prevention, appraisal, and failure costs.

Customer Returns

Merchandise that has been sold and later returned by the customer.

External Failure Cost

Expenses associated with defects that are found by the customer after the product has been delivered, including returns, repairs, and warranty claims.

Warranty Period

The specific timeframe during which a manufacturer or seller commits to repairing or replacing defective products at no charge to the customer.