Markus, Inc

question 140

Multiple Choice

Markus, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: Markus employs a standard costing system. During the year, a variable overhead rate of $5.00 was used. The labor standard requires 0.50 hours per unit produced. The variable overhead spending and efficiency variances are, respectively

• A) $10,000 U and $7,500 U.
• B) $10,000 F and $7,500 U.
• C) $7,500 U and $10,000 F.
• D) $10,000 F and $7,500 F.
• E) None of these.

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Definitions:

Preincorporation Contract

An agreement entered into on behalf of a corporation before it is legally formed.

Corporate Promoter

An individual or entity that undertakes the efforts to organize and establish a corporation, including arranging initial capital, legal requirements, and business plans.

Liable

Subject to legal responsibility or obligation, typically involving financial restitution.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another party, such as a trustee's duty towards a beneficiary.