Froelech Company Has Developed Capacity Standards -Refer to the Figure

question 27

Multiple Choice

Froelech Company has developed capacity standards. Information is as follows:
$\begin{array}{llr} \text {Standard cost of the activity capacity acquired } &\$150,000\\ \text { Standard cost of the activity capacity used } &100,000\\ \text { Standard cost of the actual activity used} &120,000\end{array}$

-Refer to the figure.What is the unused capacity variance?

• A)$20,000 favourable
• B)$30,000 favourable
• C)$35,000 favourable
• D)$50,000 favourable.

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Definitions:

Establish

To set up or found something on a firm or permanent basis, often referring to institutions, organizations, or systems.

Defense Mechanism

Psychological strategies brought into play by individuals, groups, or even nations to cope with reality and to maintain self-image.

Overemphasizing

Placing too much importance or focus on a particular aspect, detail, or activity.

Perceived Or Actual

Refers to the distinction between how a situation or condition is viewed subjectively (perceived) versus its objective reality (actual).