Montgomery Normally Produces 15,000 Units (Each Unit Requires 0

question 55

Multiple Choice

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours) ; however this year 19,000 units were produced with the following actual costs:

-Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the total budget variance.

• A) $12,510 U
• B) $3,600 U
• C) $5,000 F
• D) $12,510 F
• E) None of these.

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Definitions:

Liabilities

Financial obligations or debts that are owed by a business to another entity, which are settled over time through the transfer of economic benefits including money, goods, or services.

Capital Balances

The amount of money that the members or partners of a company have contributed and currently have in their accounts, reflecting the equity or stake in the firm.

Capital Accounts

Accounts used in accounting to track the equity and financing of partners in a partnership or of an individual in sole proprietorships.

Drawing Accounts

Accounts used to track the amount of money or assets withdrawn from a business by its owners.