At the Beginning of Last Year, Tarind Corporation Budgeted $75,000

question 71

Multiple Choice

At the beginning of last year, Tarind Corporation budgeted $75,000 of fixed manufacturing overhead and chose a denominator level of activity of 150,000 machine-hours.At the end of the year, Tari's fixed manufacturing overhead budget variance was $2,250 favorable.Its fixed manufacturing overhead volume variance was $3,750 favorable.Actual direct labor-hours for the year were 156,250.What was Tari's total standard machine-hours allowed for last year's output?

• A)157,500
• B)162,000
• C)164,000
• D)142,500

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Definitions:

Production Budget

A financial plan that estimates the number of units that need to be manufactured to meet sales goals and inventory requirements.

Cash Budget

An estimate of cash inflows and outflows for a business or project over a specific period of time, used for managing liquidity and ensuring financial stability.

Cash Receipts

The total amount of money received by a company during a specific period, including all sources of income.

Direct Labor-Hours

The aggregate amount of time spent by staff members directly participating in the creation process.