Hampton Company, a Producer of Computer Disks, Has the Following

question 83

Multiple Choice

Hampton Company, a producer of computer disks, has the following information:

-How many units must be sold to obtain a targeted after-tax income of $6,000?

• A) 115,000
• B) 42,000
• C) 90,000
• D) 105,000

---

Definitions:

Variable Overhead Efficiency Variance

The difference between actual and budgeted variable overhead costs, attributable to differences in productive efficiency.

Favorable

A term used in finance and accounting to describe a situation or variance that is better than expected or budgeted, often indicating profits or gains.

Labor Efficiency Variance

The difference between the actual labor hours used to produce a good or service and the standard labor hours expected to be used, measuring labor efficiency.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on activity levels.