White Company Budgeted Fixed Overhead Costs of $200,000 and Volume

question 113

Multiple Choice

White Company budgeted fixed overhead costs of $200,000 and volume of 40,000 units. During the year, the company produced and sold 39,000 units and spent $210,000 on fixed overhead.The spending variance relating to the fixed overhead cost is:

• A) $10,000 favorable.
• B) $10,000 unfavorable.
• C) $5,000 favorable.
• D) $5,000 unfavorable.

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Definitions:

Sales Dollar

A term representing the total dollar amount generated from sales transactions within a specific period.

Return on Assets

A financial ratio that measures the profitability of a company in relation to its total assets, indicating how efficiently the company is using its assets to generate profit.

Management

The process of planning, organizing, leading, and controlling resources within an organization to achieve its goals.

Profits

The financial gains obtained when revenues exceed the costs and expenses incurred in operating a business.