Brong Corporation Is a Shipping Container Refurbishment Company That Measures

question 268

Multiple Choice

Brong 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 March.
When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March.
-The spending variance for "Refurbishing materials" for March would have been closest to:

• A) $1,500 F
• B) $500 F
• C) $1,500 U
• D) $500 U

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Definitions:

Net Operating Income

A company's profit after subtracting all operational fixed and variable expenses but before interest and taxes are deducted.

Break-even Points

The level of sales at which total revenues equal total costs, resulting in no profit and no loss.

Fixed Expenses

Fixed costs are those that stay the same no matter how much is produced or sold, covering expenses like rental fees, employee salaries, and insurance premiums.

Break-even Sales

The amount of revenue from sales at which a business neither makes a profit nor incurs a loss.